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Updated · Bloomberg · Jun 27Bolivia Adopts Flexible Exchange Rate After 15 Years to Bolster Stability
1 articles · Updated · Bloomberg · Jun 27Summary
- Bolivia said Friday it is shifting to a flexible exchange-rate system, ending a 15-year regime in its latest macroeconomic policy change.
- The Finance Ministry said the move is meant to strengthen macroeconomic stability and keep Bolivian exports competitive.
- Daily supply and demand in the financial system will now determine the exchange rate, with the central bank overseeing the transition.
- The shift marks a broader move away from a long-standing fixed framework as Bolivia adjusts its economic policy settings.
Insights
Bolivia's currency is now floating. Will this end the dollar crisis or trigger hyperinflation and social unrest? With a floating currency, will Bolivia's lithium reserves become a lifeline with China or a bargaining chip with the IMF?