# Bolivia's Markets Rally on IMF-Backed Reforms as Fuel Subsidy Cuts Fuel Public Anger > President Rodrigo Paz's push to scrap fuel subsidies and float the boliviano has unlocked a $1.9 billion IMF program and cheered investors, even as diesel price hikes of more than 80% stoke threats of renewed street protests. - Source: Principle Post - Canonical URL: https://principlepost.com/article/bolivia-imf-reforms-markets-public-support - Author: Principle Post Staff - Section: World - Published: 2026-10-29T12:26:00.000Z - Updated: 2026-10-29T12:26:00.000Z - Tags: Bolivia, IMF, Rodrigo Paz, fuel subsidies, emerging markets --- Bolivian assets have firmed since the International Monetary Fund approved a three-year, $1.9 billion financing program for the country on October 2, rewarding President Rodrigo Paz for a reform push that includes scrapping costly fuel subsidies and moving away from 15 years of a fixed exchange rate. The Fund released an initial $214 million tranche tied to the deal, and officials have signaled plans to loosen state control over the energy and mining sectors to draw foreign capital after years of leftist economic management under the Movement for Socialism party that governed before Paz's inauguration. Paz, a center-right senator who won a runoff election after campaigning on ending Bolivia's chronic fuel and dollar shortages, inherited an economy running low on foreign reserves and increasingly unable to pay for imported diesel and gasoline at the pump. His government has framed the IMF program less as an outside imposition than as the only realistic route back toward the growth Bolivia saw during the natural-gas boom of the 2000s and 2010s, when state control of energy revenue briefly made it one of the region's fastest-growing economies. ## Diesel prices up more than 80% The reforms carry a political cost. Paz's decision to eliminate the diesel subsidy, which the government said was draining roughly $55 million a week from public finances, pushed pump prices up by about 83% almost overnight. Transport unions, Indigenous organizations and allies of former president Evo Morales have threatened to return to the streets, building on protests earlier this year that forced the government to defend the pace of its overhaul. Bolivia's bond spreads have tightened since the IMF board's sign-off, with traders citing the combination of a disbursed first tranche and a public commitment to float the currency as evidence the government intends to follow through rather than announce reforms it later walks back under street pressure — the pattern that undid earlier Bolivian stabilization attempts. ## A fragile coalition's balancing act Paz does not command a majority in Bolivia's fractured congress, and his government has had to negotiate each piece of the package with a legislature where no single bloc controls enough votes to pass structural changes alone. That has slowed the promised opening of the mining and energy sectors to foreign capital, which investors are watching as the next real test of whether the IMF program can move from stabilization into actual growth. For investors, the calculus is that a credible, IMF-anchored program outweighs near-term unrest, especially with the fixed-rate regime that long distorted Bolivia's economy now being phased out. Whether that confidence holds may depend on how much political capital Paz has left to spend as fuel costs ripple through transport fares and food prices in the months ahead, and on whether the cuts show up as improved reserves fast enough to head off a second round of austerity next year. --- Originally published by Principle Post. Free to cite with attribution and a link to https://principlepost.com/article/bolivia-imf-reforms-markets-public-support.