BOLIVIA GETS CLOSER TO CHINA, BUT TRADING IN YUAN 'DOUBTFUL'

Discussions are underway for the opening of Chinese banks in Bolivia but there are serious doubts and concerns about trading with China in Yuan currency.

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The national government’s problem is a “structural denial of the crisis in Bolivia,” said Opposition senator Cecilia Requena, which is why “distractive measures are taken that are not aimed at solving the crisis.” The senator further noted that the yuan “lacks the conditions to be an internationally accepted currency because it has many exchange restrictions that are heavily influenced by politics in an opaque manner.”

Jose Gabriel Espinoza, an economist and former director of the Central Bank of Bolivia, said that the yuan pronouncements are more politically motivated in order to lower the population’s expectations owing to a scarcity of dollars.

“You have to understand that in Bolivia and probably in the region, a large part of the consumer goods come from contraband. They do not come from Chinese markets or intermediaries in that country but are bought from secondary markets. This means resale, and for this, the dollar is used.”