Bolivia's cash cushion shrank by US$187.7 million in the third quarter, even as the country's headline reserve number climbed. The Banco Central de Bolivia (BCB) reported foreign-currency reserves fell to US$474.2 million after payments of foreign obligations, down from US$661.9 million at the end of June. The money for import bills and debt service is thinner than it was three months ago.
The bigger number tells a rosier story. Net international reserves rose 8.7% to US$3.93 billion on Sept. 30, US$315.5 million above the roughly US$3.62 billion recorded at the end of June. Gross reserves reached US$3.88 billion, up 8.8%. The bank said Bolivia's position at the International Monetary Fund and currency valuations accounted mainly for the gap between net and gross figures.
A Reserve Pile Built on Gold
Gold did the heavy lifting. During the quarter, the BCB bought 4.1 tonnes on the domestic market under Law 1503, lifting its holdings from 22.3 to 25.3 tonnes, valued at US$3.38 billion. Gold's share of total reserves jumped from 80% in June to 87%.
The central bank flagged the problem itself. It called that share "not recommendable" and urged greater diversification. Its gold holdings rose by one tonne in September even as their market value fell by US$78 million. That's volatility a reserve manager doesn't want in an asset that makes up nearly nine-tenths of the portfolio.
The report spelled out where the metal sits. Foreign banks held 14.7 tonnes, BCB vaults held 8.9 tonnes and 1.7 tonnes were in transit. Among foreign banks, Toronto Dominion Bank held the largest amount at 6.0 tonnes, while JPMorgan Chase Bank held 1.4 tonnes.
What Can Actually Be Spent
A reserve total doesn't say how many dollars are on hand today. El Deber noted that the headline figure alone doesn't show what's immediately available, and the BCB's own report makes the point plainly: most of the reserve gain came in gold, which can't be spent at once. The liquid portion of reserves was smaller than in June.
The bank did point to one real gain. Foreign-exchange operations with local banks added more than US$400 million during the quarter, which the BCB called a "genuine accumulation" of reserves. The liquid foreign currency it holds sits in short-term instruments, mainly U.S. Treasury securities. U.S. exposures represented 68% of those holdings and supranational lenders 24%.
Ratings Move Up, From a Low Base
Credit agencies have noticed. The BCB said Moody's raised Bolivia's rating from Caa3 to Caa2 with a positive outlook in early October. That's still deep in speculative grade. The report also said Fitch and S&P Global upgraded Bolivia earlier in 2026.
The report left gaps. It gave no release date, although its PDF was dated Oct. 8. It didn't identify the foreign obligations paid or offer a reserves forecast for the end of 2026. The bank made no additional official comment by Sunday, Oct. 11, and it wasn't known how quickly it would act on its own advice to diversify away from gold. The BCB set the official exchange rate at 11.73 bolivianos per U.S. dollar for Oct. 10 to 12.
Looking ahead, the BCB said its next quarterly report would cover October to December and cited an uncertain global backdrop, inflation pressure and geopolitical tension.
Why This Matters:
The quarter shows the gap between a reserve figure that looks strong and the cash a government can use. Bolivia's liquid dollars fell by more than a quarter, to US$474.2 million, while gold swelled to 87% of holdings. A central bank that calls its own portfolio mix "not recommendable" is signaling concentration risk, especially when the metal's market value can drop US$78 million in a month. For a country still rated Caa2, meeting foreign obligations without drawing down spendable dollars matters more than the headline total. The test ahead is whether the BCB diversifies, as it says it should, and whether genuine accumulation from local bank operations can rebuild the liquid cushion.