Page Seven / La Paz
The net international reserves (RIN) closed in 2021 with a level of 4,752 million dollars, a lower figure by 524 million dollars compared to 2020, a year hit by the Covid-19 pandemic, according to data from the Central Bank of Bolivia (BCB). ).
Although the stock is at sustainable levels, analysts see that this year it will not be able to improve significantly.
BCB figures reveal that in 2018 the NIRs were at 8,946 million dollars, the following year they fell to 6,468 million dollars and in 2020 to 5,276 million dollars.
Financial analyst Jaime Dunn explained that the sources for the generation of RIN are exports, attraction of foreign direct investment or capital through debt.
The problem, he said, is that the country failed to issue bonds for 3,000 million dollars that were planned and that would have raised the stock.
Regarding foreign investment, although there was an improvement last year, for an increase in the NIR to be observed, they must be fresh resources because companies often only reinvest their profits.
On the other hand, exports in the agricultural sector can grow more, but there are restrictions because the priority is the internal market.
For this year, at the international level, there are some signs that should cause concern, such as the announcement of lower economic growth in China, which may moderate the rise in the prices of raw materials. That would slow down the dynamics of national exports from the mining or agricultural sector.
“This year is more complicated because, faced with the slowdown in growth, countries apply fiscal and monetary measures as before, but the space is smaller. The United States Federal Reserve has already lowered interest rates as much as it could, but with the new wave of the pandemic there is no longer the capacity to continue lowering it,” he said.
The tendency is for interest rates to rise, which will make the debt that the country may contract more expensive and investors will seek greater profitability.
Despite everything, he clarified that the NIRs are at adequate levels in relation to GDP or exports.
Analyst Alberto Bonadona said that there are no investments that can improve the RIN, there are lower exports of natural gas and in minerals it is possible that prices are still high, as well as agricultural products.
He added that the only source that can improve the RIN somewhat is external credits, as long as they are directed to the productive sector and that in the future they allow products to be exported.
Both Bonadona and Dunn observed the country’s need to import fuel and the subsidy, but this generates a significant outflow of foreign exchange that impacts the RIN.
External purchases of fuels and lubricants as of November 2021 reached 1,697.5 million dollars, 154% more in value than in 2020, according to the IBCE.
According to the BCB, the NIR indicators are above international reference thresholds, represent 12% of GDP and cover six months of imported goods and services. “It is necessary to clarify that the NIR coverage must consider the total concept of its components such as: foreign exchange, SDR holdings, gold and other assets. Therefore, carrying out an analysis of the NIRs referring only to currencies underestimates the capacity of the national economy and is not in line with international standards”, the BCB specified in December in response to this medium.
In addition, the issuing institute highlighted that during the 2021 administration a significant trend of stabilization of the RIN was observed, compared to the 2020 administration.
Rhine Fortress
- Importance The RINs are the backing of the national currency, which is why since 2011 there is a fixed exchange rate regime. They also guarantee the payment of external debt and imports.
- Purchase The country allocates more resources to the importation of gasoline and diesel, given the drop in the production of gas and associated liquids.
