Bolivia tightens gold buying rules after past irregularities

Bolivia’s central bank has resumed purchases of domestically mined gold to bolster foreign reserves, introducing a new US dollar reference price and stricter guidelines to avoid irregularities.

President Rodrigo Paz, a center-right leader who took office on Nov. 8 after two decades of socialist rule, is seeking to preserve the benefits of state gold buying, while using a more precise price calculation and eliminating purchases involving cash advances.

Purchases resumed in December with 234 kilograms of gold, the central bank said. At current prices, that volume would be worth $35.8 million. Payments in local currency are now calculated using a US dollar reference, replacing earlier mechanisms.

Bolivia began buying locally produced gold in May 2023 as acute dollar shortages threatened subsidized fuel imports and foreign debt payments. While the country met its obligations, the program lacked full safeguards to trace the origin of the metal.

The operations were later clouded by alleged irregularities and corruption probes. Earlier this year, a former manager of the state gold trading company was arrested as part of an $18 million investigation.

Central bank President David Espinoza told reporters Tuesday that between January and October 2025, the bank made “atypical” advance payments totaling $278 million to two companies for 2.8 tons of gold.

At the same time, the bank still owes delivery of 6.6 tons of gold through October this year as a result of advance sales made in prior years, Espinoza said.

Between May 2023 and December 2025, the central bank bought nearly 36 tons of gold and monetized about 57 tons for roughly $4.7 billion, according to official data. Espinoza said most of the proceeds were used to secure subsidized fuel supplies, a practice the new administration plans to phase out after lifting those subsidies.

Bolivia’s foreign reserves stood at $3.7 billion as of December 2025, including $3.1 billion in gold and $505 million in cash. Cash reserves rose sharply from $51 million a month earlier.

With gold accounting for more than 84% of reserves — equivalent to 22.3 tons — Espinoza said the central bank is drafting legislation to amend the so-called Gold Law, which mandates a minimum holding of 22 tons. The change would give policymakers greater flexibility in managing reserves.

He added that the bank is working toward a transition from a fixed exchange rate to a flexible, unified and market-based system.

(By Sergio Mendoza)