Bolivia’s Senate approved Thursday in general terms a central bank bill that would allow the country to monetize its gold reserves, a key step to ease a dollar shortage and tame a growing financial crisis.
(Bloomberg) — Bolivia’s Senate approved Thursday in general terms a central bank bill that would allow the country to monetize its gold reserves, a key step to ease a dollar shortage and tame a growing financial crisis.
Lawmakers continued the debate on the bill’s specifics late Thursday, according to the Senate’s Twitter. After its final approval, the bill will go to President Luis Arce for his signature to turn it into law.
The new legislation will allow the Andean nation’s central bank to undertake operations with its gold reserves in international markets, generating extra dollars to improve its financial position.
The country has burned most of its international reserves and recently faced difficulties to pay for fuel imports. The central bank stopped publishing reserves data in early February, when they stood at about $3.5 billion, out of which $2.6 billion was gold, suggesting only the precious metal is left.
While the Arce administration says the ability to operate with its gold in markets will halt the “low liquidity” Bolivia is going through, opposition lawmakers criticized the bill by saying it’s not a structural solution to the current economic crisis.
Senator Silvia Salame called it a “patch” to allow Arce’s administration to stabilize the country’s situation until the 2025 presidential elections.
Finance Minister Marcelo Montenegro said the gold reserves will be replenished by buying the commodity from local producers in Bolivianos.
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.