Moody’s kept Bolivia’s grade on Ba3. The rating agency highlighted the growth and International Reserves of Bolivia, which mitigate risks. William Foster, of the Investors Service of the Rating Agency, explained that one of the challenges for the country is to overcome its high dependence on hydrocarbon exports. Moody’s added that a weak institutional framework is another hurdle. External vulnerability risk is moderate, with International Reserves at about US$ 6.9 billion, representing 21% of GDP and external debt payments of only 20% to 30% of reserves.
The Government asked Bolivian banks to repatriate capital from abroad to sort out an apparent minor liquidity problem in the financial sector. According to the Economy Minister, Luis Arce, Bolivian banks have a lot of dollars on foreign accounts, but they are not bringing back this capital. He added that the Government already asked them to repatriate this money.
We wish you a very Happy Holiday season and a peaceful and prosperous New Year from everyone at Bolivia Económica.
We will be back in January.
15% of the second year-end bonus have to be used to buy national products, established the supreme decree that regulates the payment of the benefit. According to the decree, a mobile wallet system will be established to allow the workers to buy national products, but the will have to provide their mobile numbers. The system will be optional for the private sector but the companies will need to negotiate an optional system with their workers.
Bolivia does not need to worry about its financial liquidity. By October 2018 credits in the financial sector reached $US22.2 billion, which means 12% annual growth, said the Banks Association of Bolivia (Asoban). Deposits grew at a slower rate of 6%, to reach $US24.9 billion. Asoban recognised that there is less liquidity in the system but it expressed its confidence that the situation will be reversed.
The drop in international oil prices from $US70 to $US53 between July and November this year will have a negative impact on the 2019 budget, warned the economic expert German Molina. The budget should be ready by October this year, but the Government has still not sent it for approval.
Until November this year, Bolivia’s external debt reached $US9.8 billion or 24% of the GDP. The president of the Bolivian Central Bank, Pablo Ramos, insisted that the government has still room for manoeuvre. The current debt is one of the highest in the last ten years and has increased by more than $US2 billion since December 2017, when it reached $US7.26 billion. The debt is also higher than the current International Reserves, which by the end of October were in $US8.5 billion.
The credits providing by the financial sector rose 12% between January and October, informed the Vice-minister of Pensions and Finance, Omar Yujra. In the first ten months of this year, added the authority, the credits in the financial system grew from $US21.7 billion to $US 24.2 billion, while deposits increased from $US22.7 billion to $US23.9 billion.
“2018 will close with a “”solvent”” financial system with bad loans representing only 2% -one of the lowest in Latin America- declared the director of the Supervisory Authority of the Financial System (ASFI), Ivette Espinoza.
The number of debit cards in Bolivia reached 4.6 million by September this year, 13% higher than the number registered in the same period of 2017, reported the Supervisory Authority of the Financial System (ASFI).