The Economy of Bolivia
The Boliviano Peg and Dollar Shortage
The boliviano has been pegged to the US dollar at about 6.96 since 2011, but falling reserves and dollar scarcity have caused parallel-market gaps.
A fixed rate under strain.
Peg
A fixed exchange rate anchored prices for years.
Reserves
Falling gas exports and spending drained foreign exchange reserves.
Parallel market
By the mid-2020s, dollars traded far above the official rate.
Effects
Importers struggled, and prices of imported goods rose.
A dollar queue
Importers wait weeks to buy dollars from banks.
Assuming pegs can last forever without reserves
They need backing.
Key takeaways
- The peg has held at 6.96.
- Reserves fell.
- A parallel market emerged.
- Imports became costlier.
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