Chapter

BOLIVIA

Author(s):
International Monetary Fund. Monetary and Capital Markets Department
Published Date:
September 2000
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Status Under IMF Articles of Agreement
Article VIIIDate of acceptance: June 5, 1967.
Exchange Arrangement
CurrencyThe currency of Bolivia is the Bolivian boliviano.
Exchange rate structureUnitary.
Classification
Crawling pegThe official selling rate is determined at auctions held daily by the Central Bank of Bolivia (CBB). The official exchange rate is the average of the bid rates accepted in the latest auction and applies to all foreign exchange operations in Bolivia. The auctions are conducted by the Committee for Exchange and Reserves in the CBB. Before each auction, the Committee decides on the amount of foreign exchange to be auctioned and a floor price below which the CBB will not accept any bids. This floor price is the official exchange rate and is based on the exchange rate of the dollar. The CBB is required to offer in all auctions unitary lots of $5,000 or multiples thereof; the minimum allowable bid is $5,000. Successful bidders are charged the exchange rate specified in their bid. In general, the spreads between the maximum and minimum bids have been less than 2%. Economic agents may buy and sell foreign exchange freely. All public sector institutions, including public enterprises, must purchase foreign exchange for imports of goods and services through the CBB auction market. Until January 13, 1999, sales of foreign exchange by the CBB to the public were subject to a commission of Bs 0.01 per $1 over its buying rate when the commission was raised to Bs 0.02.
Exchange taxNo.
Exchange subsidyNo.
Forward exchange marketNo.
Arrangements for Payments and Receipts
Prescription of currency requirementsNo.
Payment arrangements
Regional arrangementsPayments between Bolivia and Argentina, Brazil, Chile, Colombia, Ecuador, Mexico, Paraguay, Peru, Uruguay, and Venezuela must be made through accounts maintained with each other by the CBB and the central bank of the country concerned, within the framework of the multilateral clearing system of the LAIA.
Clearing agreementsYes.
Administration of controlThe CBB is in charge of operating the auction market for foreign exchange. The MOF, together with the CBB, is in charge of approving public sector purchases of foreign exchange for debt-service payments.
International security restrictionsNo.
Payment arrearsNo.
Controls on trade in gold (coins and/or bullion)Gold may be traded freely, subject to the following tax scale in accordance with the gross value of the sale of gold bullion: 7% for official quotations larger than $700 a troy ounce; 1% for official quotations between $400 and $700 a troy ounce; and 4% for official quotations of less than $400 a troy ounce.
Controls on exports and imports of banknotesNo.
Resident Accounts
Foreign exchange accounts permittedYes.
Held domesticallyYes.
Held abroadYes.
Accounts in domestic currency convertible into foreign currencyYes.
Nonresident Accounts
Foreign exchange accounts permittedYes.
Domestic currency accountsYes.
Convertible into foreign currencyYes.
Blocked accountsNo.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for importsNo.
Documentation requirements for release of foreign exchange for imports
Letters of creditLCs have to be opened at a bank in the Bolivian banking system.
Import licenses and other nontariff measures
Negative listCertain imports are controlled for reasons of public health or national security.
Import taxes and/or tariffsBolivia has a general uniform import tariff of 10%. A tariff of 5% is applied to capital goods and a rate of 2% is applied to imports of books and printed matter. Donations of food, including wheat, are exempt from the import tariff.
State import monopolyNo.
Exports and Export Proceeds
Repatriation requirementsNo.
Financing requirementsNo.
Documentation requirements
Preshipment inspectionEffective April 1, 1999, the process of export verification has been eliminated and replaced by a revision process by public entities. If necessary, however, exporters may contract specialized agencies for verification.
Export licensesNo.
Export taxesThere is a system of tax rebates for indirect taxes and import duty paid on production costs of exported goods and services, including the duty component of depreciation of capital goods used. Exporters of small items whose value in Bolivia’s annual exports is less than $3 million receive tax rebates of 2% or 4% of the f.o.b. export value under a simplified procedure. Other exporters receive tax and import duty rebates based on annually determined coefficients that reflect their documented cost structure. Effective April 1, 1999, tax rebates for large exporters are based on the duties paid on total production costs.
Payments for Invisible Transactions and Current Transfers
Controls on these transfers
Investment-related paymentsThere are no controls on the payment for amortization of loans or depreciation of direct investments.
Prior approvalPublic sector purchases of foreign exchange for debt service must be approved by the MOF and the CBB. Profit remittances are subject to a 12.5% tax, which is computed as equivalent to the 25% income tax times the presumed net profit of 50% of the amount remitted.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsNo.
Restrictions on use of fundsNo.
Capital Transactions
Controls on capital and money market instrumentsNo.
Controls on derivatives and other instrumentsNo.
Controls on credit operations
Commercial credits
To residents from nonresidentsAll foreign credits, including suppliers’ credits to government agencies and autonomous entities, and credits to the private sector with official guarantees are subject to prior authorization by the MOF and to control by the CBB. All proceeds of borrowings from foreign public sector agencies must be surrendered to the CBB.
Financial credits
To residents from nonresidentsYes.
Controls on direct investmentNo.
Controls on liquidation of direct investmentNo.
Controls on real estate transactionsNo.
Controls on personal capital movementsNo.
Provisions specific to commercial banks and other credit institutions
Borrowing abroadFinancial institutions may make loans in the form of credits denominated in foreign currency for imports of capital goods and inputs for the external sector with resources from international financial institutions, foreign government agencies, or external lines of credit. All overseas credits of less than a two-year term are subject to reserve requirements.
Differential treatment of deposit accounts in foreign exchange
Reserve requirementsReserve requirements for domestic and foreign exchange deposits are equal at 2%, except for time deposits for a period of more than six months and less than one year, for which foreign exchange deposits have a reserve requirement of 2%, while domestic currency time deposits are exempt.
Open foreign exchange position limitsThe limit is 80% of the value of the banks’ net worth minus their fixed assets.
On resident assets and liabilitiesYes.
On nonresident assets and liabilitiesYes.
Provisions specific to institutional investors
Limits (max.) on portfolio invested abroadThe maximum limit that pension fund administrators may invest abroad varies between 10% and 50% of the total value of the Individual Capitalization Fund. The specific limit is decided by the CBB. Pension fund administrators may invest abroad through authorized primary and secondary markets.
Other controls imposed by securities lawsNo.
Changes During 1999
Exchange arrangementJanuary 13. The commission on the sales of foreign exchange by the CBB to the public was increased to BS 0.02 per $1.
Exports and export proceedsApril 1. Tax rebates for large exporters are based on the duties paid on their total production costs, while the process of export verification was eliminated and replaced by a pension process managed by public entities.

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