Rodrigo Paz Government Ends Fixed Dollar Exchange Rate
Bolivia officially dismantled its longstanding fixed exchange rate of 6.96 bolivianos per dollar, ending a currency control mechanism that had remained in place since the administration of former President Evo Morales. The policy shift was enacted by the government of President Rodrigo Paz, whose administration moved to lift the currency peg on June 29, according to international media reports.
End of the 6.96 Bolivian Peg
The removal of the fixed rate dismantles a financial anchor that defined Bolivia’s macroeconomic policy for nearly two decades. Throughout the tenure of Evo Morales and subsequent administrations, the central bank maintained the strict 6.96-to-one valuation to suppress imported inflation and anchor domestic pricing.
According to regional coverage from outlets such as La Voz de Galicia, the policy change under President Rodrigo Paz introduces a floating market dynamic intended to address severe foreign currency shortages. Economists note that maintaining the fixed rate had drained central bank international reserves as authorities tried to defend the valuation against persistent market demand for U.S. dollars.
Broader Economic Pressures and Market Impact
The currency adjustment arrives amid mounting economic headwinds in South America, where several nations grapple with inflation, shrinking gross domestic product growth, and foreign exchange restrictions. Financial monitors, including the International Monetary Fund, have frequently cautioned regional governments against unsustainable currency pegs that deplete sovereign reserves.
Businesses and transport operators inside Bolivia have faced acute operational hurdles in recent months due to limited dollar liquidity, which complicated cross-border trade and fuel imports. The dismantling of the fixed rate is expected to realign local prices with real supply and demand conditions, though consumers face immediate uncertainty regarding cost-of-living adjustments as the market absorbs the transition.