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Bolivia Fights Currency Plunge with Dollar Sales
9 Sep
Summary
- Central bank to offer US dollars starting Wednesday.
- Bolivian currency dropped over 20% recently.
- New flexible exchange rate regime began in late June.
To counteract a sharp decline in its currency, Bolivia's central bank is set to commence offering US dollars to financial institutions starting Wednesday. This decisive action follows a significant depreciation of over 20% experienced by the Bolivian peso since the implementation of a flexible foreign-exchange regime at the close of June.
The central bank's intervention is specifically designed to curb the "unnecessary volatility" that has recently plagued the currency market. The introduction of dollars is expected to provide much-needed liquidity and restore confidence in the Bolivian economy.
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