boliviano

But a fixed exchange rate is a promise, and every promise has a cost.

To keep the Boliviano at 6.96, the central bank had to stand ready to sell dollars to anyone who wanted them at that price.

That works brilliantly when dollars are flowing in from gas exports.

When they stop, the central bank is spending its savings to defend the promise.

It kept spending and borrowed the difference.

According to the IMF's 2025 Article 4 review, the fiscal deficit was above 10% of GDP in both 2023 and 2024, and public debt had risen to about 95% of GDP.

With foreign lenders increasingly reluctant, much of that deficit was financed by the central bank, which in practice means creating new Bolivianos.

More Bolivianos chasing the same shrinking pool of dollars puts even more strain on the peg.

New dollars through the front door could quietly leave through the back.

Bolivia is effectively using a $4,000 gold price as a lifeline, but whether it stabilizes the Boliviano or just delays the reckoning depends entirely on reforms that haven't happened yet.

Three stories today, and none of them are reassuring for anyone watching a budget.

US inflation is being driven by an oil shock that the Fed may now feel compelled to respond to with higher rates, even as workers' wages fall behind.