The IMF welcomed Bolivia's efforts to improve its financial system via a sector assessment program, and called for continued improvement in terms of supervision, according to a statement from the multilateral after it concluded its 2011 Article IV consultations round.
"In order to preserve macro-financial stability, it will be important to ensure appropriate levels of banks' liquidity and capital buffers, avoid using interest rate policy and prudential rules for development purposes, and improve financial sector supervision more broadly," the IMF said.
The multilateral also said the government's deposit insurance scheme is "a useful element of the crisis management framework."
The IMF noted that with inflation picking up, interest rates have become negative in real terms. In the context of higher credit growth, banks are profitable and well capitalized, while non-performing loan ratios are low.
The de-dollarization of banks' balance sheet has continued, and Boliviano-denominated credit and deposits are currently about 55% of the total, the IMF said.
Additionally, the multilateral noted changes in the country's pension system, with congress voting for a reform that "creates a semi-contributory regime with stepped up benefits for low-income households, funded with higher contributions from employers and employees."
The pension system reform also introduces a lower retirement age and nationalizes funds administrated by the country's two private pension fund managers.