Fitch downgrades Bolivia

Fitch Ratings said it downgraded Bolivia's long-term foreign-currency and local-currency issuer default ratings to B- from B and revised the outlook to negative from stable.

“The downgrade of Bolivia's rating to B- from B reflects the depletion of its external liquidity buffers, which, in light of a de facto currency peg, has greatly heightened near-term uncertainty and risks to macroeconomic stability. The continued fall in international reserves at low levels has rendered them vulnerable to the risk of a confidence shock, which has materialized in recent weeks. External bond market access has been lost and there are no concrete prospects for large-scale support from official creditors,” Fitch said in a press release.

The revised outlook mirrors the elevated risk around the authorities' ability to manage this situation, its severity given an ongoing delay in the publication of international reserves data, the agency said.

“Bolivia's especially low near-term external commercial service remains its key rating strength, supporting repayment capacity on these obligations, but even this could be called into question amid declining and uncertain FX availability,” Fitchs said.

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