Macroeconomic Forecast Bolivia

Inflation decreased slightly to 10.44% y-o-y in August, its lowest point since February 2011. This comes as welcome news for the central bank, since Bolivia is highly susceptible to inflationary pressures, mainly stemming from rising food prices, imports and the current expansionary monetary policy. The central bank's crawling peg looks steady at BOB6.90/US$, in line with our full year forecast of BOB6.89/US$. The peg's sustainability is further bolstered by the central bank's foreign reserves, which stood at US$11.54bn in September, up from US$9.73bn at the end of 2010.

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