Bolivian Central Bank To Buy Gold From Local Producers

On Saturday, Bolivia’s Lower House approved the so-called “Gold Bill,” which seeks to strengthen the national gold reserves by directly purchasing this material from local producers.

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Such a bill authorizes the Central Bank of Bolivia (BCB) to buy gold dore, an unrefined mixture of metallic gold and silver, in the domestic market and then convert it into monetary gold, which is the one that the world’s central banks manage, through a refining process.

Although the BCB will not need parliamentary authorization to conduct operations with the international gold reserves that such an initiative will generate, it will have to inform which operations it makes with these reserves to the Assembly every four months.

"The new bill will help to stabilize the country’s economy in the long term since it will turn the gold of local producers into an international asset, which guarantees liquidity," BCB President Edwin Rojas pointed out.

Rojas estimated that the new gold purchase strategy will generate about US$1.2 billion and significantly increase the BCB gold reserves, 98.7 percent of which are located abroad and managed by international financial institutions.

“Investing gold reserves in international financial markets is a common practice of central banking since it allows generating income for the benefit of the economy," he recalled, urging citizens not to trust unreliable information on the BCB.

President Luis Arce encouraged the Bolivian parliament to pass other initiatives that increase the country’s international credits, which are indispensable to fight the economic recession prompted by the COVID-19 pandemic.