Bolivia: Government says that lack of dollars was a temporary and speculative problem

The government of Bolivia He assured that the lack of dollar liquidity in 2023 was a “transitory” problem that was due to “speculation” and that it will be overcome with projects to “diversify the economy” of the country.

“There are people who want to speculate and get into the speculation business (…) that’s where the idea of ​​a lack of dollars comes from,” said Economy Minister Marcelo Montenegro at a press conference in eastern Santa Cruz.

The minister said that “evidently”, in 2023, there was a drop in the flow of foreign currency in financial entities, since it went from 336 million dollars in January to 236 million in the following month.

While in April “the lowest point” of liquidity occurred, with 130 million dollars, “and then recovered,” he explained.

”The banks, as of December 2023, have accumulated 348 million dollars, even higher levels than those they had in 2014, 2015 and 2021,” said the Minister of Economy.

Montenegro pointed out that “if there were a lack of dollars,” Bolivia would not be able to pay its external debt or afford the import of fuel.

In this regard, he said that last year the hydrocarbon subsidy “has implied a sacrifice of the treasury to maintain this economic stability” since it reached 12,678 million bolivianos (1,836 million dollars).

The minister indicated that the subsidy is a measure so that the country has “a base of protection” to counteract inflation.

He also mentioned that imports of diesel and iron will decrease when the country starts up its biodiesel and metals plants along with the arrival of new technology for lithium exploitation.

The lack of Dollars in 2023 coincided with the decrease in net international reserves (RIN), which according to the report offered by the Central Bank of Bolivia (BCB) On Thursday they reached 1,709 million dollars, until December.

Bolivia’s reserves reached their maximum level in 2014, when they reached 15,122 million dollars.

Recovery

Last year, Montenegro highlighted the “recovery” of bank deposits that reached “$30,962 million as of November last year,” while the country has a default rate of 3%, “one of the lowest in the region.”

Tax collections “have had a notable performance”, since they went from 31,040 million bolivianos (4,495 million dollars) in 2020 to 47,184 million the previous year (6,833 million dollars), he said.

Likewise, the external debt reduced from 33% in 2020 to 29.7% in 2023 and the accumulated inflation last year was 2.12%. For this year, the Government of Luis Arce projected growth at 3.71% , an inflation of 3.6% and public investment will reach 4,274 million dollars.