Bolivia: Currency & Financial System

Bolivia's currency is the boliviano, introduced in 1987 to replace the Bolivian peso at a rate of one million pesos to one boliviano, following a period of runaway inflation that had eroded savings and shaken public confidence in the financial system. Issued by the Central Bank of Bolivia (Banco Central de Bolivia, BCB) and divided into 100 centavos, the boliviano succeeded two earlier currencies that had also carried the same name since the nineteenth century.

Bolivia's banking sector has long operated alongside heavy dollarization, with a large share of savings held in US dollars rather than bolivianos, a legacy of earlier currency crises that the government has tried to reverse through tax incentives favoring boliviano accounts. The BCB built substantial foreign exchange reserves during the 2000s and early 2010s, but those reserves fell sharply over the following decade, contributing to a dollar shortage that strained banks, importers, and ordinary households alike.

As of 2026, Bolivia has moved away from the fixed exchange rate the BCB had maintained since 2011, when it pegged the boliviano at a set rate to the US dollar. Facing persistent reserve shortages, the central bank shifted toward a more flexible, market-based exchange rate in mid-2026, a change officials described as a necessary adjustment after years in which the fixed peg had become increasingly difficult to sustain.