What Is the Currency in Bolivia and How Does It Work?

Bolivia’s currency is central to its economy, shaping daily transactions and international trade. A clear understanding of the currency system is vital for investors, tourists, and residents engaging with the Bolivian economy.

Official Name and Symbol

The official currency of Bolivia is the Boliviano, represented by the symbol “Bs” and the ISO code BOB. It was introduced in 1987 to replace the peso boliviano at a rate of one million to one, as part of a strategy to combat hyperinflation and stabilize the economy. The symbol “Bs” appears on all currency notes and coins, ensuring clarity in financial transactions, invoices, and contracts.

In international finance, the ISO code BOB is used for currency exchange and trading, facilitating accurate conversions and financial analysis.

Issuing Authority

The Central Bank of Bolivia (Banco Central de Bolivia, BCB), established in 1928, issues and regulates the Boliviano. It ensures monetary stability and supports economic growth by managing foreign reserves and implementing monetary policy. The BCB’s efforts to control inflation and regulate the money supply aim to create a stable financial environment.

Operating under the Bolivian Constitution and the Law of the Central Bank of Bolivia, the BCB is granted autonomy to perform its duties without political interference. Its policies align with national goals, such as reducing poverty and fostering growth, while adapting to global economic trends. The BCB also designs and distributes currency with advanced security features to prevent counterfeiting, using tools like open market operations and interest rate adjustments to influence liquidity and inflation.

Denominations in Circulation

The Boliviano is available in various denominations of coins and banknotes. Coins include 10, 20, and 50 centavos, and 1, 2, and 5 Bolivianos, made from nickel-plated steel and aluminum-bronze. Banknotes are issued in 10, 20, 50, 100, and 200 Bolivianos, incorporating security features like watermarks and security threads. The banknotes also highlight national figures and cultural imagery, showcasing Bolivia’s heritage.

Exchange Rates

Exchange rates play a significant role in Bolivia’s international trade and investment. The rate is influenced by factors such as inflation, interest rates set by the Central Bank, and the country’s overall economic stability. These factors determine how the Boliviano compares to major currencies like the US Dollar and the Euro. The Central Bank actively monitors exchange rate fluctuations and may use foreign reserves to stabilize the currency when necessary by buying or selling foreign currency. Global events, such as commodity price changes, also impact exchange rates, given Bolivia’s reliance on resource exports.

Acceptance in Financial Transactions

The Boliviano is legally mandated for all financial transactions in Bolivia, ensuring a uniform monetary system. While foreign currencies are rarely accepted outside major hotels and airports, tourists and expatriates can convert their money into Bolivianos for local use. In the informal economy, cash payments in Bolivianos are the norm, particularly among street vendors and small retailers. In urban areas, larger businesses increasingly accept digital payments like credit cards and mobile banking, though transactions are still conducted in Bolivianos.

For international transactions and cross-border trade, the Boliviano has a more limited role, with businesses often relying on globally recognized currencies like the US Dollar. However, the Boliviano’s stability in recent years has strengthened its reputation for domestic use, symbolizing confidence in Bolivia’s financial system.