The Central Bank of Bolivia (BCB) launched a Christmas Bond, available from December 16, 2019 to January 31, 2020. This financial instrument offers an interest rate of 4.5% per annum over a period of 119 days (four months).
Bolivia’s President, Jeanine Añez, named economist Guillermo Aponte Reyes as interim president of Bolivia’s Central Bank (BCB) and also nominated four interim directors: Luis Armando Pinell Siles, Walter Morales Carrasco, Jose Gabriel Espinoza Yañez and Roger Alejandro Vargas Rivero. Aponte Pensions Superintendent during the second government of Gonzalo Sanchez de Lozada.
Standard & Poor’s put Bolivia’s rating to BB- and revised its outlook to negative. Citing “risks to external and debt positions”, S&P said there was at least a one in three chance of a downgrade in the next six to 18 months, amid political uncertainty, poor GDP growth prospects and further erosion of fiscal metrics.
The illegal trade in pesticides at national level generates an estimated $45.3 million in the informal market, almost 14.3% of the supply in the domestic market, according to data from the Bolivian Institute for Foreign Trade (IBCE) and the Association of Suppliers of Agricultural Supplies (APIA). The legal market trades 96,717 metric tons, with a value of $343 million.
Bolivia’s traditional exports fell 24% in volume and 6% in value between January and October 2019, reported the Bolivian Institute of Foreign Trade (IBCE). Traditional exports represent 79% of Bolivia’s total exports and natural gas is the main product, whose exports fell 25% in volume and 18% in value. Regarding non-traditional exports that include products such as soybean, there was an increase of 17% in volume but a drop of 2% in value.
Bolivia’s government named Herland Soliz Montenegro as new CEO for state oil company YPFB. Soliz replaces Jose Luis Rivero who left the office after announced that YPFB is in economic bankruptcy, although he retracted later on this statement. However, oil and gas experts warned that YPFB is going through economic difficulties as a result of a continuing expansion on spending and negative results in exploration and unprofitable industrialisation projects.
2019 has been a particularly difficult year for Bolivia’s hydrocarbon sector. There was a drop in about 24% of gas production compared to 2014; reserves fell to 7.3 trillion cubic feet (TCF); Brazil fined Bolivia with $133 million; and the signed addendum to the contract with Argentina involves a 40% reduction in export volumes compared to the initial agreement, which means a revenue drop of Bs.6.757 million ($977.5 million), according to national and regional Government sources.
Bolivia’s YPFB reported that it plans to ship about 42,000 tons of nitrogen fertilizer between December 2019 and January 2020, according to the Program of the Directorate of Derivatives and Industrialized Products (DPDI) of the State-owned company. They shall allocate volumes of urea to the internal and external market.
Brazil and Bolivia agreed that from the 1st. January 2020, Brazil will continue to pay for Bolivian gas nominations. Brazil will also not ask for the maximum volumes stipulated in the contract that formally will end this month.
Production of soybeans, maize, sunflower wheat, chia and sage fell by 5% in 2019, said Bolivia’s grain association (Anapo). Anapo’s presidente, Miguel Pantoja, said that the production generated $985 million, 15% lower than 2018. Stagnant production surface, lack of policies to solve existing structural problems, and low international prices are some of the factors that affected the sector.