Bolivia’s bonds soared this week, leading emerging-market gains, as optimism grew over multilateral support and progress on a bill to unlock its gold reserves.
(Bloomberg) — Bolivia’s bonds soared this week, leading emerging-market gains, as optimism grew over multilateral support and progress on a bill to unlock its gold reserves.
The nation’s dollar bonds due 2028 jumped 12 cents to 60.8 cents on the dollar in the past five days for the biggest weekly gain since the notes were issued in 2017, according to indicative pricing data collected by Bloomberg. Bonds due in 2030 also climbed Friday, bringing the weekly advance to 13 cents.
Up until this week, money managers had shunned Bolivia’s debt, making it the worst in the developing world this year, as the country’s foreign reserves dried up.
Gains accelerated on Friday after lawmakers in the lower chamber approved the broad framework of a bill that if approved, could ease the dollar shortage that has roiled the economy in recent months. Lawmakers will debate further details on the bill on Saturday afternoon, according to a statement posted on Congress’ website.
The central bank has spent nearly all its cash reserves and exchanged its Special Drawing Rights from the International Monetary Fund to defend its currency peg with the US dollar. But the monetary authority still has nearly $3 billion of gold, which could potentially buy the country some breathing room.
Demand for the bonds picked up earlier this week after Bloomberg reported the nation is in advanced talks with regional multilateral lender Corporacion Andina de Fomento to meet this year’s financing needs.
–With assistance from Maria Elena Vizcaino.
(Updates with weekly moves throughout, details on gold reserves)
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