Bolivia declared a national health emergency and extended its border lockdown on Wednesday, as the government seeks to contain the spread of the coronavirus. The border closure was extended to April 15 from March 31 previously. Bolivia has 38 confirmed cases of coronavirus, according to government data.
Key rating considerations are summarized below.
Banco Nacional de Bolivia S.A.’s (BNB) B1 long-term local currency deposit rating reflects its b1 baseline credit assessment (BCA) and incorporates Moody’s assessment of a high probability of support from the Bolivian Government (B1 negative) in case of stress, although the bank’s ratings receive no uplift as its BCA is positioned at the same level of the Bolivian sovereign rating.
Amid the situation of the country, the financial institutions are in solidarity with the population in the emergency. Banks BCP, Mercantil Santa Cruz and BNB postpone the collection of credits until June. At Banco Bisa, those whose payments are due from March 1 to May 15 will have their payments deferred to the last instalment of their credit.
The National Chamber of Commerce (CNC) called for the establishment of a body to oversee the economy and employment. Among the measures to analyse in that Committee, they propose: define mechanisms to recover the demand, internal consumption and the liquidity of the companies; recomposition of the chain of payments in all the productive, commercial and services areas, to assure the continuity of the operations of suppliers and employees. They suggest developing programs that facilitate the maintenance of formal employment and promote labour reconversion.
The Central Bank placed Bs 3,476 million ($500 mn) by buying National Treasury bonds held by Private Fund Administrators. The resources will go to the banks, which will increase their liquidity by 50%. As of Friday, March 20, the sector had Bs 6,806 million ($1 bn) in cash. After the cash injection, banks will have Bs 10,282 million ($1.5 bn) to channel to the public.
The micro-enterprise sector is one of the most affected by quarantine due to coronavirus. The workshops closed, and several people lost their source of income. They are asking for state support. Five thousand productive units are in danger in Santa Cruz.
Bolivian Customs reported that imports of medical supplies needed to combat the coronavirus were freed from taxes and will clear within 24 hours. So far, it received 175 requests for the release of medical supplies, of which they dispatched already 117.
FONPLATA, Development Bank granted Bolivia $200,000, through non-reimbursable technical cooperation, which will be channelled through the Ministry of Health of Bolivia for the purchase of supplies and emergency medical equipment, to minimize the spread of the COVID-19 virus and mitigate the adverse effects on the country’s population.
The Government is working to ensure that exports of Bolivian royal quinoa to the United States and European markets are made under the designation of origin because of the unique nutritional characteristics and size of the grain, which is only produced in Bolivia.
The coronavirus outbreak has an impact on the income of the productive sector, particularly on micro and small enterprises (SMBs) that report a drop in sales of up to 100 percent. Due to the situation, they are demanding an extension of the time for rescheduling loans in the banking sector from two to twelve months.
