By Alexander Saeedy


Bonds backed by the Bolivian government have dropped nearly 20% this month as the country faces a growing balance of payments crisis.

The landlocked Latin American country's 4.5% bonds due 2028 were recently quoted around 57 cents on the dollar, compared to around 70 cents at the beginning of the month, according to data from Solve Advisors Inc.

Bolivia has over $2 billion of outstanding foreign currency bonds, according to Solve.

Bolivia runs the risk of depleting the country's stockpile of foreign reserves, which it has spent in defense of its fixed exchange rate and also on non-government external debt payments, according to a Moody's Investors Service report on March 23.

The country faces a $183 million balloon payment for a bond due in August. Bolivia reported approximately $3.5 billion in international reserves as of February 2023, around $2.6 billion of which are held as gold, and $372 million held as foreign exchange.

"Foreign exchange reserves have reached very low levels, their lowest in over 20 years, and a confidence shock has led to increased demand for hard currency from the general public," according to the Moody's report.

Bolivia's federal legislature has considered measures to possibly monetize its gold holdings to help alleviate the country's balance of payments pressures. It has also recently approved a 200 million euro ($216 million) loan from the Agence Française de Développement, a development agency affiliated with the French government.


Write to Alexander Saeedy at alexander.saeedy@wsj.com


(END) Dow Jones Newswires

03-28-23 1236ET