Bolivia's fixed exchange rate dies, markets cheer while construction crumbles.

The week in Bolivia opened with a signal that would have been unthinkable barely a month ago: Bolivian country risk fell below 500 basis points, according to Bloomberg Línea, marking a remarkable shift in perception for an economy that local economists themselves were describing just weeks ago as facing its worst crisis in 67 years. The figure does not erase the structural problems still suffocating the country, but it does confirm that international markets are processing the change of government and the exchange-rate reform more favorably than the domestic deterioration would suggest.

The defining event of this moment is the abandonment of the fixed exchange rate that had been in place for 15 years. As of Monday, the Banco Central de Bolivia operates under a flexible regime, with the official dollar trading around Bs 10.85, according to El Deber, though Economy Minister José Gabriel Espinoza himself pledged to stabilize it below Bs 11 in the coming days. The transition has been turbulent: in barely two weeks the official dollar rose by more than one boliviano, and in a single session it jumped from Bs 10.40 to Bs 10.50. The Instituto Boliviano de Comercio Exterior (IBCE) welcomed the adjustment as a "reality check" for the economy, but warned that the real challenge now is attracting fresh hard currency, not merely acknowledging the scarcity of what already exists.

Exchange-rate volatility is hitting unevenly. The construction sector faces public contracts signed under the previous exchange rate that no longer hold up, El Deber reports. Twenty construction firms are demanding payment of Bs 30 million for Tren Metropolitano works the state has yet to honor. Import trade associations go further: they argue the problem is not just the dollar, but the combination of a more expensive parity with a tax burden that makes imports even costlier. The ministry, for its part, is trying to contain the alarm by reminding markets that 99.3% of loans are denominated in bolivianos, which limits the risk of a broad balance-sheet effect.

Wheat output fell to its lowest level in three decades, according to Anapo, which is demanding a national plan to reactivate agriculture. Poultry production has accumulated losses of more than 400 million dollars due to the blockades that shook the country in recent weeks. Those 50 days of paralysis left 14 dead and losses estimated by business leaders at more than Bs 14.545 billion, according to Los Tiempos. The business sector, grouped under the Confederación de Empresarios Privados de Bolivia (CEPB), convened a national emergency summit that kicked off Monday in La Paz, with expectations of finalizing a concrete reactivation agenda with President Paz's government. The Cámara de Industrias is already proposing an emergency fund and a family stipend as initial measures.

The International Monetary Fund mission resumed meetings with business leaders in parallel to its dialogue with the government. The organization's ten recommendations, already circulating in local media, aim to consolidate fiscal adjustment, reduce subsidies, and improve the transparency of public accounts. The reformulated budget has already cut Bs 20 billion and reduced the projected fiscal deficit to 9%, still an elevated figure but a significant correction compared with the expansionary years under the MAS model. Fitch Ratings maintains a "negative" outlook for Bolivia, but S&P upgraded its rating, and the drop in country risk suggests that the one-billion-dollar sovereign bond issuance — successfully placed in international markets — found enough demand to give reserves some breathing room.

The government also announced that on July 15 it will begin returning dollar deposits, with a phased one-year schedule starting from one thousand dollars per saver. The Banco Central additionally lifted restrictions on foreign-currency withdrawals from personal accounts, and bank cards may now be used for international purchases at the reference exchange rate. These measures aim to defuse the distrust built up over months of an informal "corralito" that was never officially declared as such.

On the trade front, the episode of Bolivian timber held up in Chile and Brazil over a false alarm involving controlled substances illustrates the fragility of export channels. The trucks were released after any contamination was ruled out, but the damage was already done: exporters estimate losses in the millions and have announced they will demand compensation from the Chilean prosecutor who ordered the seizure, whom they accuse of staging a "media show." Meanwhile, Cochabamba projects a 4.15% contraction for 2026 with formal employment at just 14.6%, while accumulated inflation in that city already exceeds the national average at 5.28%, according to business data cited by Los Tiempos.

What to watch in the coming days is whether the business-government summit produces concrete commitments or ends in declarations of intent, whether the exchange rate manages to stabilize before uncertainty spills into long-term contracts, and whether the IMF mission advances toward some kind of formal financial-backing agreement that would send a definitive signal to markets. The political stakes are considerable: the 2025 elections are already on the horizon, and according to El Deber, economic management is the main criterion by which Bolivians will judge the candidates.

**YPFB (state-owned, not listed)** — The Bolivian state oil company claimed to have reactivated 100% of tanker-truck logistics for fuel supply to service stations after weeks of chronic shortages, though the responsible minister admitted he could not set a date for the end of the queues. The fuel crisis, which according to analyst Carlos Delius requires a constitutional reform to be structurally resolved, exposes Bolivia's vulnerability to the depletion of its gas fields and the cost of importing gas which, according to Los Tiempos, could be ten times higher than the subsidized domestic price.

**Gestora Pública de la Seguridad Social de Largo Plazo (state-owned, not listed)** — Investments managed by Bolivia's Gestora rose by 1 billion dollars, according to Los Tiempos, at a time when debate over the early withdrawal of AFP contributions is raising questions about the long-term sustainability of the pension system. The portfolio increase contrasts with a 58% drop in private banking profits, attributed to the massive loan deferrals ordered by the previous administration.