Arce Admits the Dollar May Never Return to Official Rate | Arce admite que el dólar quizás nunca vuelva al tipo oficial

By Brújula Digital:

President Arce says it is “likely” that the dollar will not return to the official exchange rate

The president said that among the reasons making it unlikely for the dollar to return to the official exchange rate is “planet-wide” inflation. He ruled out a devaluation of the national currency.

President Luis Arce in an interview with No Mentirás 4-0. Photo: ABI

The president of the State, Luis Arce, stated that “it is likely” that the dollar will not return to the official exchange rate of 6.86 bolivianos for buying and 6.96 for selling, but he ruled out a devaluation of the national currency.

Arce, in an interview with No Mentiras 4.0, was asked whether the dollar would “never return” to the official exchange rate. To this, he replied: “It’s likely, for many reasons.”

The causes

Among the reasons, he said, is the inflation that has been felt “around the globe,” as well as the rise in production costs, which—he stated—affects the country due to “imports.” He added that the production of hydrocarbons is not expected until 2026 or 2027.

“Since a large part of our imports comes from countries that have increased their costs, they will arrive at higher prices with what we import, and that, added to the fact that we are not yet generating the capacity—until 2026 or 2027, as we have said—to produce hydrocarbons, makes it clear that the dollar will no longer return to 6.96,” he stated.

Currency devaluation

When asked about a devaluation of the boliviano, Arce said it is not a “simple” matter and that doing so requires a financial cushion, that is, international reserves to sustain the new exchange rate; however, the country does not currently have that option.

“Today we don’t have it; we live day to day, all the dollars we have are basically for fuel, to pay the debt, and all that, we don’t have enough left to physically face the exchange market additionally,” he asserted.

He pointed out that when an economy begins to devalue without real and financial support, it causes economic collapse. “We’ve seen it in Argentina,” he stated.

Due to the dollar shortage the country is facing, the exchange rate in the parallel market has exceeded double the official rate, at times reaching 17 bolivianos per dollar for selling.

BD/AGT

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