Bolivia to Impose Further Restrictions on the Dollar
As part of its efforts to "de-dollarize" the economy, the Bolivian government has announced that by 2016 all banks and credit unions in Bolivia offering accounts in dollars will be required to hold 66.5% of total deposits they receive in dollars, in reserve at the Central Bank of Bolivia. This will leave just 33.5% available for lending. Currently banks are required to reserve 30% of all dollar deposits, leaving 70% available for lending. Application of this measure will begin in April of 2013, increasing gradually through 2016, and applies only to bank accounts in dollars.
Banking entities Asofin (Association of Financial Entities Specializing in MicroFinance) and Asoban (Association of Banks) were quick to note that this measure is a disincentive to transactions in dollars and warned that it would make it even more difficult for the country to attract foreign investment. Deposits in Bolivia's official currency, the boliviano, had already increased to 72% in 2012, leaving only 28% in dollars.
Nelson Hinojosa, president of the Asofin, stated that the purpose of this measure is to make it impossible for Bolivian banks to offer accounts in dollars, eliminating them completely by 2016. Asoban president, Kurt Koenigsfest, stated that the measure will not only deter deposits in dollars, but also credits. Marcelo Zabala, head of the Banco Central de Bolivia, countered that all countries neighboring Bolivia are also taking steps to protect their currencies and avoid inflation.
Date: 29 January 2013 Source: Eju.tv