Bolivia's gold reserves: controversy over Central Bank's advance sales
Mon Sep 22 2025
Bolivia faces growing debate over the management of its gold reserves after the Central Bank authorized advance sales of the metal to obtain U.S. dollars amid legal and transparency concerns.
The country officially holds about 24.1 tons of gold, but only 9% -- just over 2 tons -- is stored in Bolivia. The rest is kept in foreign banks.
By law, the Central Bank must maintain a minimum of 22 tons, although recent transactions have raised doubts whether that requirement is being met.
Rodrigo Rosa Laserna, a Bolivian systems engineer, told UPI that the country's measures reflect the government's urgency to secure liquidity.
"The Central Bank approved advance sales of more than 17 tons in a few months. They say future production will cover those deliveries, but in practice, the current reserves are under pressure," he said.
Economy Minister Marcelo Montenegro has defended the strategy, saying the reserves are not kept in physical vaults, but rather invested in international banks such as the Bank for International Settlements in Switzerland and major commercial institutions.
"It would be negligent to keep the gold stored in La Paz when it can generate returns abroad," the minister said in an interview with the Bolivian outlet El Deber.
However, critics warn that the Central Bank is interpreting the law too loosely. A 2023 law set a mandatory minimum of 22 tons to protect the reserves, but a semiannual calculation could allow the country to hold less gold than the law requires.
The issue deepened after the Central Bank approved a resolution allowing reserves to temporarily fall below the 22-ton minimum. Opposition lawmakers have called for on-site inspections of vaults to verify how much gold is actually there.
Adding to the legal controversy is a structural problem. Much of Bolivia's gold is mined informally and smuggled into neighboring countries such as Peru and Chile.
Experts estimate that between 20 tons and 30 tons leave Bolivia illegally each year. Instead of selling to the Central Bank, many producers prefer to take the metal abroad, where they are paid directly in U.S. dollars. Rodrigo Rosa said this is one of the most critical issues.
"The state requires miners to sell to the Central Bank under unfavorable conditions, so they turn to smuggling. That creates a gap between what appears in official statistics and what is actually circulating in the economy," he said.
Even though international gold prices remain at record highs, Bolivia's legal exports fell more than 70% in 2024, according to the National Institute of Statistics.
Analysts say the so-called "Gold Law" has encouraged smuggling rather than strengthening reserves.
For now, the Central Bank says it will meet the 22-ton requirement by replenishing reserves with domestic purchases in the coming months.
However, with the presidential runoff Oct. 19, concerns are growing that the true cost of the strategy will fall on the next government.
Christian Democratic Party presidential candidate Rodrigo Paz Pereira -- winner of the first round -- has said gold is the key tool for addressing Bolivia's economic crisis, noting it now generates more than $4 billion annually,
He has proposed "formalizing" small-scale mining cooperatives "instead of attacking them," as is happening now because they do not pay taxes and cause environmental damage, by creating a state-backed mining bank.
Source: https://www.upi.com/