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Bloomberg reports Bolivia’s plan to remove fuel subsidies by 2027 under a proposed IMF program. Jonathan Fortun warns that the fiscal adjustment comes before other reforms can deliver results. He highlights limits on central bank financing as a credible commitment and identifies the removal of lending rate caps and credit quotas as a major political test.
View detailsEmerging markets attracted $11.3 billion in portfolio inflows in August, with debt accounting for almost all of the total despite high US bond yields and no sovereign issuance. Equity purchases in Taiwan and India offset selling elsewhere. Jonathan Fortun examines whether demand for emerging market debt can withstand upcoming Federal Reserve and Bank of Japan decisions and the return of new issuance.
Read the workBolivia’s central bank sold $35 million as it sought to reduce exchange rate volatility. Jonathan Fortun tells Central Banking that the parallel market was already pricing a stronger boliviano than the official fixing, interpreting the sale as an adjustment toward market pricing. His comments connect currency intervention with the competing need to accumulate foreign exchange reserves under the proposed IMF program.
View detailsBolivia plans to eliminate fuel subsidies by 2027 as part of its fiscal adjustment under a $1.9 billion IMF program. Jonathan Fortun warns that the subsidy cuts arrive before other reforms can deliver results. He highlights limits on central bank financing as a credible commitment and identifies the removal of lending rate caps and credit quotas as a major political test.
View detailsHigher long yields increasingly reflect the real cost of capital. Real yields explain most of the 2026 increase in the United States and Japan, while inflation compensation plays a larger role in Britain and Germany. Bond and swap markets reveal how fiscal demands compete for savings. Debt management and currency intervention can buy time, but durable relief requires fiscal adjustment and credible inflation control.
Read the workBolivia’s IMF program has advanced on exchange rate reform and central bank financing, but fuel pricing remains its hardest political test. Jonathan Fortun examines how currency depreciation and import costs have eroded earlier subsidy reforms, arguing that postponement can shift the adjustment from higher pump prices to shortages. The essay connects reform sequencing with the credibility of the 2027 budget.
View detailsMexico’s shift toward domestic bondholders has reduced the peso’s exposure to foreign capital flight. Jonathan Fortun explains why this can cushion global risk shocks while leaving a different vulnerability: fiscal deterioration or stress in the local financial system could force domestic investors to sell, weakening that protection.
View detailsFortun explains how weak mechanisms for correcting policy deviations contribute to elevated sovereign risk premiums.
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