Bolivian Congress approves $1.9 billion IMF loan program to ease currency crisis

Congressional approval and financing structure

Bolivian lawmakers concluded the legislative approval of a $1.9 billion financing program with the International Monetary Fund on September 18, 2026, after the measure cleared the Chamber of Deputies on September 17. The 36-month loan, structured under the IMF Extended Fund Facility, passed both legislative chambers with more than a two-thirds majority. Government officials expect the package to facilitate access to more than $5 billion in supplementary credits from international lenders, including the World Bank and the Inter-American Development Bank. President Rodrigo Paz celebrated the outcome, describing the funds as essential for stabilizing domestic finances and rebuilding foreign exchange reserves.

This support demonstrates that, when the common good comes first, ideological differences take a back seat. These resources are intended to shield our reserves and open real opportunities for investment and employment.

Subsidy elimination and structural conditions

Under the reform terms agreed with IMF technical staff in July 2026, Bolivia agreed to implement fiscal and monetary adjustments in exchange for the credit line. A central condition mandates the complete elimination of government fuel subsidies starting in January 2027, moving domestic gasoline and diesel sales from fixed official rates to floating international prices. Authorities noted that fixed fuel prices had drained foreign currency reserves over roughly twenty years while encouraging cross-border smuggling that caused domestic fuel shortages. The policy shift faces opposition from transport and agricultural unions, though the government stated that budget cuts will include protection mechanisms for vulnerable sectors.

Reserve replenishment and deficit targets

Economy Minister Christian Morales defended the stabilization plan before the legislature, outlining the depleted liquidity inherited by the administration. Morales noted that net international reserves stood at $3.17 billion, with liquid reserves totaling only $52 million. Government projections indicate that reserves will increase to nearly $6 billion by the end of 2026, almost $8 billion at the end of the program in 2028, and approximately $9.07 billion by 2031. The stabilization package also requires reducing the national fiscal deficit from 9.1% of gross domestic product in 2026 to 6.4% in 2027 and 3.8% in 2028, while restricting central bank monetary financing of public debt.

Political division and state of emergency

The economic vote unfolded alongside heightened domestic political tensions. Simultaneously with the loan approval, the Legislative Assembly ratified an extension of the national state of emergency, which has been in place since June 20, 2026, due to widespread road blockades by groups aligned with former president Evo Morales. Paz, a centre-right leader whose election ended roughly two decades of socialist administration under Morales and Luis Arce, has pivoted away from the anti-IMF stance of his predecessors. While former interim president Jeanine Añez contracted a $327 million emergency IMF loan in 2020 that Arce later returned, the current agreement represents Bolivia's first multi-year credit framework with the fund in decades. The approved law now awaits final presidential promulgation.