S&P trims Bolivia

S&P said it lowered its long-term foreign- and local-currency sovereign credit ratings on Bolivia to B- from B and removed the ratings from CreditWatch, where it placed them with negative implications on March 15. The outlook is negative.

“The downgrade reflects higher external vulnerabilities. Outflow of dollars increased over the last two months, amid weaker public confidence in the sustainability of the exchange rate regime, with the Boliviano de facto linked with the U.S. dollar since 2011,” S&P said in a press release.

The negative outlook indicates the risk of even less liquidity, which could hurt economic stability. “Political disagreements, including within the governing coalition, raise questions about the government's ability to secure timely approval of new loans from congress that, along with other measures, could support external liquidity and strengthen public confidence,” the agency said.

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