Bolivian dollar rate reaches 12.26, its highest level under flexible exchange system

The dollar will reach 12.26 bolivianos in Bolivia on Wednesday, surpassing the highest rate recorded since the country adopted a flexible exchange-rate system.

The Central Bank of Bolivia said the previous peak came on July 31, when the dollar reached 12.15 bolivianos. The currency had generally declined through much of August, but began rising again on Aug. 24 and reached a new high for Sept. 2.

The bank said it would intervene in the foreign-exchange market when necessary to prevent sharp movements. It stressed, however, that intervention would not defend a particular dollar price or establish a fixed exchange rate.

David Espinoza, president of the central bank, said the exchange rate must respond to supply and demand for foreign currency under the new flexible regime. “We do not defend a specific exchange rate. Under a flexible exchange-rate regime, there is no stable, uniform exchange rate. It has to vary,” he said.

The dollar was trading below the official rate on the parallel market. Reference prices recorded Tuesday night were 12.19 bolivianos for purchases and 12.18 for sales.

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We do not defend a specific exchange rate. Under a flexible exchange-rate regime, there is no stable, uniform exchange rate. It has to vary.