There is little information available regarding the specifics of Bolivia's monetary policy transparency practices beyond that offered in passing in International Monetary Fund (IMF) reports covering monetary policy content and execution, and there is no direct assessment of Bolivia's compliance with this standard, either overall or at the level of individual constituent principles as set forth in the IMF's Code of Good Practices in Monetary Policy. Bolivia is not yet a member of the IMF's Special Data Dissemination Standard (SDDS), although it has participated in the less stringent General Data Dissemination System since 2000. A 2007 IMF Report on the Observance of Standards and Codes does allude to Bolivian intentions to subscribe to the SDDS at some future time.

General Overview

In a Letter of Intent to the International Monetary Fund (IMF) dating to 2001, Bolivian authorities expressed their ongoing commitment to a strong central bank, but other than specifying the central bank's mission (keeping inflation low), the letter does not clearly enumerate the Central Bank of Bolivia's (BCB) specific role and responsibilities. There is no further publicly available information regarding Bolivia's compliance with the IMF's Code of Good Practices in Monetary Policy.

According to the 2007 IMF Article IV Consultation report, Bolivia's inflation situation would benefit from "greater exchange rate flexibility and a more active use of open market operations" (p. 10). The Fund found that greater flexibility would help reduce effective dollarization. It also argued that the then-current exchange rate was undervalued and that an adjustment through inflation of the real exchange rate would negatively impact the poor. Recommendations offered by the IMF included enhanced flexibility, allowing for "some acceleration in the pace of nominal appreciation" (p. 11) as is provided by the use of a "crawling-peg" regime, but ultimately the move to a managed float was suggested. As to broader monetary policy, the Fund recommended an expanded use of open market operations in order to deal with short-run excess liquidity.

These findings met with the agreement of Bolivian monetary authorities, generally speaking, although the authorities differed with the Fund staff regarding the necessary magnitude of adjustments. The 2007 IMF report noted that Bolivian authorities did acknowledge the possibility of moving toward greater exchange-rate flexibility, and requested technical assistance to develop a plan by which to devise the kinds of institutional changes that would be needed to make such a transition. The Statistical Issues Appendix of the Article IV report (Appendix IV) found that Bolivia's monetary statistics broadly comply with the Monetary and Financial Statistics Manual regarding coverage, sectorization, and timeliness. The data derives from balance sheets generated by the central bank and the commercial banking sector, as well as private investment funds, credit unions, and savings and loan associations.

The IMF's 2006 statistical mission to Bolivia reported back to the Article IV Consultations team that the data from deposit institutions showed weaknesses in account sectorization, but noted that the Superintendency of Banks and Financial Institutions (SBEF) issued revised reporting forms and guidelines to address this problem. The Appendix also noted that the BCB had initiated monthly surveys of other financial institutions, including pension fund and insurance industry data. The surveys will also draw upon data from entities such as the Nacional Financiera Boliviana (NAFIBO) and the Fondo de Desarrollo del Sistema Financiero y de Apoyo al Sector Productivo (FONDESIF). According to the report, this measure should enable the BCB to improve its quarterly reporting on the flow of funds accounts and "will be the first step in the production of a balance sheet approach matrix" (p. 11).

Bolivia is not yet a subscriber to the IMF's Special Data Dissemination Standard (SDDS), but participates in the less rigorous General Data Dissemination System (GDDS). According to the IMF's 2007 Report on the Observance of Standards and Codes (ROSC), however, Bolivia plans to subscribe to the SDDS at some point in the future.

The Principles

Clarity of roles, responsibilities and objectives of central banks.

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There is no publicly available information directly addressing Bolivia's compliance with this principle. In a Letter of Intent to the IMF dating to 2001, Bolivian authorities expressed their ongoing commitment to a strong central bank, but other than specifying the central bank's mission (keeping inflation low), the letter does not clearly enumerate the BCB's specific role and responsibilities.

Open process for formulating and reporting monetary policy decisions.

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There is no publicly available information directly addressing Bolivia's compliance with this principle. In a Letter of Intent to the IMF dating to 2001, Bolivian authorities expressed their ongoing commitment to a strong central bank, but other than specifying the central bank's mission (keeping inflation low), the letter does not clearly enumerate the BCB's specific role and responsibilities.

The Statistical Issues Appendix of the IMF's 2007 Article IV Consultations report (Appendix IV) found that Bolivia's monetary statistics broadly comply with the Monetary and Financial Statistics Manual (MFSM) regarding coverage, sectorization, and timeliness. The data derives from balance sheets generated by the central bank and the commercial banking sector, as well as private investment funds, credit unions, and savings and loan associations . The IMF's 2006 statistical mission to Bolivia reported back to the Article IV staff that the data from deposit institutions showed weaknesses in account sectorization, but noted that the SBEF issued revised reporting forms and guidelines to address this problem. The Appendix also noted that the BCB had initiated monthly surveys of other financial institutions, including pension fund and insurance industry data. The surveys will also draw upon data from entities such as the NAFIBO and the FONDESIF. According to the report, this measure should enable the BCB to improve its quarterly reporting on the flow of funds accounts and "will be the first step in the production of a balance sheet approach matrix" (p. 11).

Public availability of information on monetary policy.

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In a Letter of Intent to the IMF dating to 2001, Bolivian authorities expressed their ongoing commitment to a strong central bank, but other than specifying the central bank's mission (keeping inflation low), the letter does not clearly enumerate the BCB's specific role and responsibilities.

The BCB maintains a Spanish-only website on which may be found monetary policy related publications. The BCB posts data on the IMF's GDDS website, including the BCB's broad money and credit aggregates, as well as those of all other depository corporations. For these postings, the BCB uses the IMF's MFSM methodology. Overall, however, there is insufficient publicly available information directly addressing Bolivia's compliance with this principle.

Accountability and assurances of integrity by the central bank.

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There is no publicly available information directly addressing Bolivia's compliance with this principle. According to the 2007 IMF ROSC data module , the BCB's governing legislation establishes, and its formal Code of Conduct specifically covers integrity, confidentiality, and professional independence. New hires must sign a confidentiality agreement. The ROSC found that the BCB adheres to a commitment to professionalism in the conduct of its affairs. According to the ROSC, the BCB "maintains some informal contacts with data users, but there are no formal mechanisms to monitor the relevance of the statistics or to identify emerging data requirements" (p. 5).