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Country financeMay 26 2023

Bolivia’s economic model called into question

A dollar shortage and falling international reserves are highlighting the limits of a very heterodox economic model. Barbara Pianese reports.
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Bolivia’s economic model called into questionPegged rate: Bolivia’s dollar exchange rate has not changed since 2011. Image: Bloomberg

In March, queues formed outside Banco Central de Bolivia (BCB), after it announced that it would begin a “direct sale” of US dollars to calm intensifying worries over dollar shortages.

Bolivia’s foreign currency crisis reflects several short-term problems, including the rise in interest rates around the world and higher fuel prices because of the war in Ukraine. But it also stems from long-term problems, including the reduction in hydrocarbons exports.

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Barbara Pianese is the Latin America editor at The Banker. She joined from Mergermarket, where she spent four years covering mergers and acquisitions across Europe with a focus on the consumer sector. She holds an MA in International and Diplomatic Affairs from the University of Bologna having studied in Brazil and France as well.
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