Dollar hits Bs 11 as Bolivia abandons fifteen-year peg overnight.

The boliviano has lost a quarter of its value in just a few weeks, and today the dollar touched Bs 11 in the flexible market—a psychological threshold that, until barely two months ago, would have been unthinkable in a country that held its exchange rate fixed at Bs 6.96 for fifteen years. The speed of the adjustment, more than its magnitude, is what sets this moment apart: Bolivia is not undergoing a gradual devaluation but an abrupt reconfiguration of the relative prices across its entire economy, with knock-on effects already being felt from construction to soybeans.

The dollar's jump to the Bs 11 threshold, confirmed by El Deber and Los Tiempos, is not happening in a vacuum. It coincides with confirmation of the agreement with the International Monetary Fund, which could mobilize up to $2.8 billion, according to Economy Minister José Gabriel Espinoza. The timing of the two events is no accident: the IMF demanded precisely the abandonment of the fixed exchange rate as a condition for restoring formal relations with a country whose external debt has just hit a record $14.358 billion—a figure on which Bolivia is now paying more than it receives in disbursements, according to Central Bank data cited by Los Tiempos. The Fund's mission, which this week resumed meetings with the business sector in parallel with talks with the Government, is not negotiating liquidity alone: it is negotiating the architecture of a reform program the Government aims to sustain through 2029.

Espinoza has sought to contain the alarm. He stated that the dollar will stabilize below Bs 11 in the coming days, that 99.3% of financial system loans are denominated in bolivianos, and that the credit portfolio will therefore not suffer automatic deterioration from the depreciation. The financial architecture inherited from the MAS model—which aggressively de-dollarized the economy from the middle of the last decade—here acts as an involuntary buffer: the direct currency exposure of indebted households is limited. But that does not mean the adjustment will be painless. The construction sector, which operates under contracts denominated in bolivianos but with inputs priced against the dollar, is already suffering a severe compression of margins. Twenty construction firms are demanding payment of Bs 30 million for work on the Metropolitan Train, and public contracts have become financially unviable at the exchange rates originally agreed.

The effect on agricultural production is equally worrying. The diesel shortage—which the Government attributes in part to logistical difficulties at the port of Arica—has paralyzed 80% of interdepartmental buses and puts 800,000 tons of soybeans in Santa Cruz at risk, just as winter planting should be advancing. The Association of Oilseed and Wheat Producers (Anapo) further warns that wheat production has fallen to its lowest level in thirty years, a sign of structural deterioration that goes beyond the current cycle. The poultry, dairy, and banana sectors have also reported direct losses attributable to the 50 days of blockades that paralyzed key routes, causing 14 deaths and economic losses estimated at $2.7 billion, according to Los Tiempos.

Against this backdrop, confirmation of the IMF agreement lands laden with ambiguity for the private sector. The Bolivian Institute of Foreign Trade (IBCE) acknowledges that the flexibilization of the exchange rate brings the economy into line with reality, but warns that the challenge now is to attract genuine foreign currency inflows rather than merely validating the price of a dollar that is in short supply. Business associations go further: they report that suppliers are already refusing bolivianos in some commercial transactions, a phenomenon of informal dollarization that erodes monetary authority before the Central Bank has even finished publishing its regulations on the new flexible regime. Samuel Doria Medina, businessman and prominent political figure, has set his forecast at a ceiling of Bs 12 per dollar, ruling out scenarios of Bs 15 or more. Private-sector analysts, meanwhile, are proposing an injection of physical dollars into the banking system as a short-term containment measure.

What is at stake in the coming weeks is the credibility of the transition. The Government has also announced that on July 15 it will begin returning more than $930 million in bank deposits that had been restricted under the de facto corralito operated by the previous administration, a process that will unfold over a year. If the return is managed in an orderly fashion, it could reinforce confidence; if it takes place amid persistent exchange-rate pressures, it could accelerate dollar demand and complicate stabilization. Fitch maintains its outlook on Bolivia at "negative," and S&P has slightly upgraded its assessment, but the margin for error for President Paz's Government is narrow. What the market will watch most closely in the coming days is whether the exchange rate converges below Bs 11 as Espinoza promised, or whether the gap between official rhetoric and the market price continues to widen.

**Banco Económico (Bolivia, not internationally listed)** — The institution marked its 35th anniversary amid an unusually volatile banking environment, with sector profits falling 58% due to the loan deferral scheme imposed under the previous administration. The staggered return of dollar deposits beginning July 15 represents both a relief for savers and a liquidity stress test for the system as a whole.

**Gestora Pública de Seguridad Social de Largo Plazo (Bolivia, state-owned)** — Investments managed by the Gestora rose by $1 billion, according to Los Tiempos, in a context where the depreciation of the boliviano is accounting-revaluing foreign-currency-denominated assets within the portfolio. The Gestora's systemic significance—administering the pension savings of Bolivian workers—makes it a key player in any scenario of exchange-rate stabilization or stress.