Bolivian government sends $1.9 billion IMF deal to Congress for review

Bolivia’s $1.9 billion agreement with the International Monetary Fund has reached Congress, where lawmakers will examine the deal and decide whether to approve it. President Rodrigo Paz submitted the agreement along with a bill supporting the government’s economic reform program.

Economy Minister Christian Morales said the bill, identified as Law 723, arrived at the legislature the previous week. The government sent additional information in recent days so lawmakers could begin their review. Morales said all legislators would have access to the agreement and its terms.

The package would provide Bolivia with 1.369 billion special drawing rights, equivalent to $1.9 billion. According to the bill, the money would help the Andean country address persistent fiscal and external imbalances that have affected it in recent years.

The debt could be repaid over up to 10 years from each disbursement. The interest rate is set at 3.47%, although it may change with the value of the special drawing rights. Repayments would begin after four years and six months, while the disbursement period could last up to 36 months.

Bolivia and the IMF formalized the agreement on July 29. The deal is also expected to help attract about $5 billion in additional financing from other multilateral institutions. Its commitments include continuing to rationalize public spending, maintaining zero monetary financing of the fiscal deficit, and strengthening the operational governance and autonomy of Bolivia’s central bank.

The agreement comes as Bolivia continues to deal with a crisis that emerged in 2023 through shortages of foreign currency, falling net international reserves and high inflation. The government has begun returning dollar savings after two years of restrictions on withdrawals and transactions. Since late June, it has also operated a flexible exchange-rate regime in place of the fixed system used for 15 years. The central bank said reserves reached $4.255 billion on Aug. 14.

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The foreign currency we obtain from the IMF will allow us to increase the country’s international reserves, guarantee the flow of foreign currency to the market and continue stabilizing the exchange rate.