Bolivia has formally abandoned its fixed exchange rate regime, allowing the boliviano to float freely for the first time since 2011.
The central bank established an initial floating rate of 9.73 bolivianos to the US dollar, signaling a decisive shift in monetary policy after more than a decade of currency controls.
The move comes as the country grapples with deepening economic turbulence.
In a direct response to the instability triggered by the end of the peg, authorities have also reduced import tariffs by five percentage points across the entire tariff schedule, effective July 6. This dual approach aims to mitigate inflationary pressures on essential goods while allowing the currency to find a market-clearing level.
For investors, the transition introduces significant volatility risk but also potential realignment opportunities.
The boliviano’s new floating status will directly impact the competitiveness of Bolivia’s key export sectors, particularly battery minerals such as lithium.
A weaker currency could boost export revenues in dollar terms, though it may also complicate supply chain costs for foreign operators reliant on imported equipment.