Bolivia Updates Banking Regulations to Mitigate US Dollar Shortage

The Financial System Supervision Authority (ASFI) has announced changes to the Regulations on Interest Rates, Commissions and Fees in an effort to address Bolivia’s exchange difficulties. These amendments aim to enhance transparency in the financial market by providing information on interest rates, commissions and fees offered by financial entities.

New Regulations: Key Changes

The new regulations will be binding on all Financial Intermediation Entities (EIFs) and Complementary Financial Services Companies (ESFCs), including banking entities and other financial services companies. The key changes include:

• Commissions on transfers abroad: Supervised entities will no longer charge customers for foreign transfer transactions made during each half month, up to an amount of USD 1,000. For transactions exceeding this amount, commissions will be charged between 5% and 10%.
• Commissions on drafts abroad: Similar rules apply to foreign draft services, with costs only applicable for amounts exceeding USD 1,000.

Implementation Timeline

Supervised entities have until February 23, 2024, to adjust their rate schedules. The first report under the new regulations, M030 “Monthly Rates,” must be submitted by March 10, 2024, with information for February 2024.

Government’s Measures: A Step Towards Mitigating US Dollar Shortage

The Government’s measures aim to mitigate Bolivia’s US dollar shortage, and these changes are seen as a positive step towards implementing programmatic solutions. However, some experts warn that price control measures may lead to damage in the long term if they interfere with market supply and demand dynamics.

What’s Next?

As the new regulations take effect, it will be interesting to see how they impact the financial sector and the economy as a whole. Will these changes help alleviate Bolivia’s exchange difficulties, or will they have unintended consequences? Only time will tell.