Bolivia's Economic Shift: A Return to Flexible Exchange Rates?

Bolivia Considers Return to Flexible Exchange Rate System Santa Cruz, Bolivia – Bolivian presidential candidate Samuel Doria Medina's economic team has proposed a return to a flexible exchange rate system, a move that has sparked considerable debate. The proposal, discussed on the eju.tv news program "La Hora Pico," suggests that the Bolivian exchange rate should be determined by the market demand for the US dollar. Economist Gabriel Espinoza, a member of Doria Medina's team, explained the rationale behind this proposal. "The objective is to return to the exchange rate scheme we had before the fixed exchange rate," Espinoza stated. He argued that this would allow for a more dynamic and responsive exchange rate, adjusting to fluctuations in the market. The current system, he added, has isolated Bolivia's economy from the global market. The proposal has significant implications for Bolivia's economy, particularly in light of its historical dependence on gas exports. Espinoza stressed the need for diversification, suggesting that a flexible exchange rate would encourage the development of other sectors, such as tourism. The transition, however, is expected to be gradual, with the central bank playing a role in managing any potential volatility. The success of this proposal hinges on Bolivia's ability to successfully diversify its economy. The plan represents a significant departure from current economic policies and a potential turning point for Bolivia's economic future.