Fitch downgrades Bolivia as sliding reserves threatens economic stability

MEXICO CITY, March 14 (Reuters) - Fitch Ratings downgraded Bolivia's long-term foreign-currency and local-currency issuer rating to B- from B on Tuesday, citing a depletion of external liquidity buffers and a sharp fall in international reserves denting economic stability. The landlocked South American nation has seen net foreign currency reserves fall from over $15 billion just under a decade ago to $3.5 billion last month, which has sparked anxiety about access to dollars and rattled the local currency. Fitch also revised the Andean nation's outlook to negative from stable, citing "heightened uncertainty around the authorities' ability to manage this situation" and a delay in publication of up-to-date reserves data. "The continued fall in international reserves at low levels has rendered them vulnerable to risk of a confidence shock, which has materialized in recent weeks," Fitch said, adding the issue was linked to rising spending and falling gas production. It added that Bolivia did not face major near-term bond repayments but that the issue could raise debt risks. "External bond market access has been lost and there are no concrete prospects for large-scale support from official creditors," it 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."
(Reporting by Javier Lopez de Lerida and Anthony Esposito; Editing by Cynthia Osterman)