What is happening with the dollar in Bolivia? The greenback is getting scarce. Reserves in the US currency have been declining for years and for a month the Central Bank has been practically the only way to obtain it, creating long lines of concerned citizens and the emergence of a parallel market.
Since March, Bolivians have been waiting in long lines to buy dollars at the Central Bank because it is almost the only place where they can get the green ticket. The Government rejects that there is economic instability and denounces a speculative outbreak of “bad Bolivians”.
The truth is that parallel markets that sell dollars above the fixed exchange rate prosper and the Central Bank gives weeks to comply with the sales. What is behind this unusual demand?
“Is quite worrying”
“The explanation of this happens by that great part of the deficit fiscal that faces bolivian has that see with he subsidy to the hydrocarbons. bolivian carry a regime of subsidy with a price of hydrocarbons liquids, gasoline and diesel permanent from 2005. So, in the last years he cost of these hydrocarbon subsidies ha been growing and evidently, to difference of others items of the deficit fiscal, this demand dollars”, explains Gabriel Espinoza, economist and former director of the Central Bank of Bolivia.
“As he government ha I come facing up a drop of income in currencies basically because the production of gas, that is the major fountain of income for he government central, ha I come in decline, has started to consume the Bookings international of the Bank Central. AND this ha arrived to a limit. Is quite worrying. TO finals of the 2022 and already for January and February of the 2023, HE unleashed the expectations negative of the people and HE it started this crisis would change that we are living today day,” he continues.
“Increasing inflationary pressures”
The fear of shortages, fueled by purchase restrictions, only aggravates the demand for dollars. What consequences does this crisis have for the Bolivian economy?
“He great problem is that great part of are restrictions for obtain foreign exchange by part of importers, merchants and the same people that ha deposited their resources in he system financial, HE this overturning to the prices. bolivian consume a great amount of products imported, well those importers are seeing that the commissions of shipments to the abroad of currency foreign begin to increase strongly, that you start to have ready of wait for obtain currencies… There are pressures inflationary growing that HE go to notice newly between April and May of this year”, details the economist.
Given this scenario, the Bolivian government seeks to strengthen international reserves, discourage the purchase of dollars and fight against speculation. Meanwhile, Bolivia threatens to stop being an exception in a Latin American region punished by high levels of inflation.
