Bolivian Lawmakers Approve $1.9 Billion IMF Stabilization Loan

Bolivian lawmakers approved a $1.9 billion financing agreement with the International Monetary Fund (IMF) on Friday to address foreign currency shortages, high inflation, and dwindling international reserves. The 36-month Extended Fund Facility program aims to restore macroeconomic stability and is expected to unlock additional funding from the World Bank and the Inter-American Development Bank, potentially raising total financing to over $5 billion.

Rodrigo Paz immediately acted on the approval by eliminating subsidies for diesel used by trucks, buses, and tractors to satisfy IMF conditions, though gasoline subsidies remain in place. To offset the resulting cost increases, Paz announced $79 million in cash assistance for 2.9 million citizens and preferential loans for affected businesses. He stated that the measure would "guarantee supplies 24 hours a day, seven days a week."

The stabilization plan includes tightening monetary policy, reducing the fiscal deficit, and modernizing the exchange-rate framework. The government targets total international reserves of $6 billion by the end of 2026, noting that liquid reserves had already reached $1.1 billion by August 8. The shift toward conservative economic policy follows two decades of socialist rule.

The agreement faces fierce opposition from the Bolivian Workers’ Central and other unions, who warn that the required spending cuts will increase the cost of living. The program now awaits final approval from the IMF executive board.