LA PAZ, July 22 - Bolivia is on the verge of announcing an agreement with the International Monetary Fund for financing in the range of $2.5 billion to $2.8 billion, Economy Minister Gabriel Espinoza said on a local radio program on Wednesday.
Espinoza indicated that slightly more than half of the pledged IMF resources will be disbursed by early September. He said those incoming funds are designated solely to strengthen the central bank's foreign-exchange reserves.
The minister also said the expected IMF arrangement should unlock further financing conversations with other multilateral institutions. If those follow-on agreements materialize as anticipated, total external funding available to Bolivia this year could exceed $5 billion.
Espinoza emphasized that the IMF has effectively validated the government's ongoing economic program and its objectives for narrowing the fiscal deficit. He tied that validation to the government's recent policy adjustments, including a shift implemented in June to a single, flexible exchange rate intended to support the productive sector rather than relying on state-defined rates.
An IMF spokesperson said the institution remains in close contact with Bolivian authorities and that discussions are continuing.
The comments arrive after the government in May revised down its external financing expectations for the year to around $5 billion, nearly half of an earlier projection of $9 billion. Espinoza framed the government’s recent policy changes as responses to both financing needs and the disruption caused by more than a month of roadblocks and social unrest.
Context and implications
The IMF funds, with a majority arriving by early September and dedicated to foreign-exchange reserves, are presented by officials as a near-term stabilizing measure for Bolivia’s external position. Authorities expect the IMF accord to act as a catalyst for additional multilateral financing, potentially bringing total outside funding for the year above $5 billion.
Separately, the government’s move to a single, flexible exchange rate in June is cited as part of a broader economic program the minister says the IMF has endorsed. The rate shift is intended to help the productive sector by moving away from state-defined exchange-rate mechanisms.
What remains uncertain
- The precise timing and size of follow-on commitments from other multilateral organizations are not detailed and remain contingent on ongoing discussions.
- The government previously downgraded its external financing forecast in May to around $5 billion from a prior $9 billion projection, indicating a tighter external financing outlook for the year.
- Policy adjustments are being implemented in the aftermath of over a month of roadblocks and social unrest, the longer-term economic effects of which are not specified in detail.