Bolivia overhauls gold-buying rules after past irregularities

Bolivia’s central bank has resumed purchases of domestically mined gold to shore up foreign reserves, rolling out a new US dollar–linked pricing system and stricter rules aimed at preventing a repeat of past irregularities.

The move comes under President Rodrigo Paz, a centre-right leader who took office on November 8 after two decades of socialist rule. While retaining the state’s role in buying gold, Paz’s administration is tightening oversight by refining price calculations and scrapping transactions that involve cash advances.

The Central Bank of Bolivia (BCB) said purchases restarted in December with the acquisition of 234 kilograms of gold, worth about $35.8 million at current prices. Payments to suppliers are now calculated in local currency using a US dollar reference price, replacing earlier mechanisms that lacked clear market linkage.

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Bolivia began buying locally produced gold in May 2023, when acute dollar shortages threatened subsidised fuel imports and foreign debt payments. The programme helped the country meet its obligations but was criticised for weak safeguards, particularly around tracing the origin of gold and monitoring transactions.

Those concerns deepened as the programme became mired in allegations of irregularities and corruption. Earlier this year, a former manager of the state gold trading company was arrested as part of an $18 million investigation, underscoring governance lapses under the earlier framework.

Central bank President David Espinoza said that between January and October 2025, the BCB made “atypical” advance payments totalling $278 million to two companies for 2.8 tonnes of gold—a practice the new rules now prohibit.

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Espinoza also said the bank remains obligated to deliver 6.6 tonnes of gold by October this year, stemming from advance gold sales carried out in previous years.

Official data show that between May 2023 and December 2025, the central bank purchased nearly 36 tonnes of gold and monetised about 57 tonnes, generating roughly $4.7 billion. Espinoza said most of those proceeds were used to secure subsidised fuel supplies, a policy the new government plans to unwind as fuel subsidies are lifted.

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 holdings rose sharply from just $51 million a month earlier.

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

He added that the bank is also preparing for a gradual shift from a fixed exchange rate regime to a flexible, unified and market-based system.