Bolivianisation of economy brings shortage of foreign currency – big business for black market
Evo Morales’ government pushing to expand the bolivianisation of the country’s economy has resulted in a shortage of foreign currency – particularly of US dollars – and to a subsequent growth of the exchange black market, it as repirted.
Bolivia’s Central Bank (BCB) last week stopped all direct currency exchange operations but foreign money was still available at exchange parlours and other banks. Not anymore. Now it seems to be the time for black market traders to thrive due to the shortage of US banknotes.
We can not say what day there will be dollars [again], a National Bank of Bolivia (BNB) was quoted as saying.
Analysts consider this to be the consequence of the national government’s drive towards bolivianisation. In other words, that all transactions are carried out in the local boliviano currency.
With the monetary policy of bolivianisation, the government discourages commercial transactions in dollars tightens the regulation machine, economist Daniel Atahuichi explained.
He added that when hyperinflation reached 25,000 percent in the 80s, the people’s pockets were regulating the exchange rate.
But now that hyperinflation has been controlled ”we have the instrument of Open Market Operations (OMA) which promotes bolivianisation, said Atahuichi.
When the BCB is generating expectations in the economic agents, in the citizens, what it is doing is to promote the parallel market (of the dollar), he pointed out.
The BCB took the administrative measure to suspend the sale of dollars … (but) the supply of this currency will not be affected, read a press release issued during the November 2 holiday.
BCB Pablo Ramos Sánchez had vowed dollars would still be available through private banking and exchange psrlours throughout the country.”