Bolivian governor says country faces ‘liquidity crisis’

Authorities’ response to bank failure could worsen financial stress, analysts say

Central Bank of Bolivia

The governor of Bolivia’s central bank has said his country faced “a liquidity crisis”, but “not a solvency crisis”, as it runs short of foreign exchange.

One Bolivian bank failed last month after a run on deposits, and regulators plan to repay dollar depositors in local currency. Several observers tell Central Banking that the move could exacerbate Bolivia’s reserves crisis, adding that a new law would not provide more than temporary respite.

In an interview with The Banker, published on May

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