What Is the BOB (Bolivian Boliviano)?
The Bolivian boliviano (BOB) is the national currency of Bolivia. Although the most recent version of the boliviano was introduced in 1987, previous versions of the currency have existed since 1864.
- The Bolivian boliviano is the national currency of Bolivia.
- Introduced in 1987, it is the most recent of a series of Bolivian currencies to carry that name.
- Although Bolivia has experienced significant currency devaluations in its recent history, the current boliviano has been relatively stable thus far.
Understanding the Bolivian Boliviano
The boliviano is issued and overseen by Bolivia's central bank, the Banco Central de Bolivia, which disseminates the currency in both coin and banknote formats. A single boliviano is comprised of 100 subunits, called centavos.
Its modern coins were introduced in 1988 and currently come in denominations of 10, 20, and 50 centavos. In addition, larger coins worth one, two, and five bolivianos are also in circulation. Its modern banknotes were introduced in 1987 and today feature denominations of 10, 20, 50, 100, and 200 bolivianos.
When first introduced in 1864, the boliviano replaced the Bolivian scudo at a rate of 1 boliviano to 0.5 Bolivian scudi. At the time, the boliviano pegged to the French franc (F) at a rate of 5 francs to 1 boliviano. In 1908, however, Bolivia abandoned this currency peg and adopted the gold standard, pegging the currency at 12.5 bolivianos to 1 British pound (GBP).
History of the Boliviano
The history of the Bolivian boliviano can be confusing, because several different currencies have shared the "boliviano" name. For instance, the version of the boliviano introduced in 1864 is substantially different from the boliviano in use today.
Following its adoption of the gold standard, the boliviano underwent a period of devaluation against the GBP lasting between 1928 and 1938. By the end of this period, the peg rate had increased to 160 bolivianos per British pound.
In 1940, the Bolivian government began accepting multiple exchange rates between the boliviano and the U.S. dollar (USD). By 1963, however, the boliviano had resumed its devaluation, prompting the government to replace it with a new currency—the peso boliviano (BOP)—which began circulation at an exchange rate of 1,000 to 1, relative to the previous version of the currency. Continued inflationary pressures led Bolivia to replace the peso boliviano with the modern boliviano in 1987, introducing it roughly at par with the dollar, or 1 million new bolivianos per peso boliviano.
Since 1987, the central bank has allowed the boliviano to float freely against other currencies. The government has also targeted inflation since that time, through partial privatization of public-sector businesses and legislative policymaking designed to promote private investment.
Real World Example of the Bolivian Boliviano
Since 2008, the boliviano's value has held remarkably stable against the U.S. dollar in a band between roughly 6.7 to 6.9 bolivianos per U.S. dollar. At the same time, the inflation rate has gradually come under control and has averaged around 5% per year between 2009 and 2018.
Bolivia's economy has also grown steadily throughout that time frame. Its per-capita gross domestic product (GDP), measured in terms of purchasing power parity (PPP), has achieved a compound annual growth rate (CAGR) of roughly 4.5% between 2009 and 2018. Whereas in 2008 it average 4,698 per person, its per-capita GDP had grown to 7,477 in 2018.