Bolivia has practically exhausted its Special drawing rights (YOU) part International Monetary Fundwhich aggravates the currency crisis in one of the poorest countries in Latin America.
According to data from FMI as of March 31, the country only had 39.09 million SDRs, reserve assets that work like an overdraft and are not subject to conditions. That equates to about $53 million.less than 10% of your allocation and a fraction of the Funds available at the beginning of this year.
It is another red flag for Bolivia, where its few remaining foreign currency reserves are locked up in gold that the government is not authorized to convert into US dollars. The Central Bank stopped publishing reserve data at the beginning of Februarywhen they were around US$3.5 billion, of which US$2.6 billion was gold.
Bolivia: they restricted the purchase of dollars and large queues were generated at their central bank
Since then, two of the three main rating companies have cut Bolivia’s rating citing a confidence shock, and long lines have formed at the central bank to get the scarce foreign exchange.
According to Luis Gerardo Pratosenior economist at Torino Capital in Caracasthe outlook is worrying because there is a crisis of confidence in the government’s ability to sustain the exchange rate.
Stocks have been falling since they peaked ate US$15.5 billion in 2014as the government burns cash to maintain an 11-year-old fixed exchange rate regime.
As the crisis deepens, money managers have been dumping the Andean nation’s bonds at a record pace, making them the worst emerging market stocks this year, according to a Bloomberg index.
The Government can still resort to multilateral organizations, Prato said. The authorities could raise short-term rates for local dollar deposits or pass a controversial law to convert gold reserves into cash, although a proposal to allow it failed to advance in Congress two weeks ago.
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