Bolivia just ripped off a monetary band-aid it had been wearing since 2011. The country’s fixed dollar peg, a cornerstone of its economic policy for 15 years, is officially done.
Economy Minister José Gabriel Espinoza announced the shift to a flexible exchange-rate system on May 5, 2026, as the central bank’s reference rate blew past 10 bolivianos per dollar. The move is designed to restore macroeconomic stability in a country where the gap between official and real-world currency prices had become almost comically wide.
A peg that stopped working long before it was removed
Bolivia’s foreign reserves peaked at $15B in 2014. They’ve since fallen to dangerously low levels, leaving the government unable to maintain the fiction of a stable exchange rate.
The result was predictable. A parallel market emerged where dollars traded at rates between 12.9 and 14.5 bolivianos, compared to the official peg. In some cases, parallel market rates were inflated by up to 100% above official levels.
