UPDATE 2-Bolivia banks suspend La Paz operations amid unrest, protests continue

Several Bolivian ‌banks ​on Tuesday temporarily closed branches in the city of La Paz over security concerns as anti-government unrest escalates. Demonstrations by unions, miners, transport workers and rural groups have grown in recent weeks, pressing centrist President Rodrigo Paz to roll back austerity measures and address rising living costs.

Several Bolivian ‌banks ​on Tuesday temporarily closed branches in the city of La Paz over security concerns as anti-government unrest escalates.

Demonstrations by unions, miners, transport workers and rural groups have grown in recent weeks, pressing centrist President Rodrigo Paz to roll back austerity measures and address rising living costs. Some ‌protesters have called for his resignation, reflecting a broader backlash against his government, which took office in November in an end to nearly two decades of leftist rule.

Banks including Banco Nacional de Bolivia, Banco de Credito de Bolivia (BCP), Banco Economico and state lender Banco Union shuttered some branches in downtown La Paz, according to a Reuters reporter and notices on local media. The banks re-directed ‌customers to online banking services and ATMs. Workers at five banks on Tuesday told Reuters that operations would not resume until protests had subsided.

Bolivia's banking association, ASOBAN, declined to ‌comment on the cause of the closures but said the banks were still partially operational. While central La Paz remained relatively calm on Tuesday morning, some protesters were heading to the area and a public transport strike was reported in neighboring El Alto. Access to the Plaza Murillo square, where the presidential palace is located, was tightly controlled by police.

The protests have also triggered widespread roadblocks, stranding trucks on highways and contributing to shortages of food, medical supplies ⁠and fuel. ​At least 32 roadblocks were reported on Tuesday. Bolivia's state ⁠energy company YPFB said on Monday blockades at its Senkata plant and several other roads nationwide had forced it to suspend shipments to affected areas. Authorities are expected to announce measures this week to allow supplies to enter ⁠La Paz and El Alto.

In neighboring Paraguay, some Bolivian truck drivers at a logistics hub near Asuncion said they were waiting for things to calm down at home. "I have colleagues who have been on ​the road 10 days, and they can't get there and unload," said Richard Daza, 47.

BOLIVIA UNREST TESTS NEW PRESIDENT PAZ Paz, who inherited an economy in turmoil, ⁠has pushed to cut spending and scale back fuel subsidies to stabilize public finances. He has raised the minimum wage by 20%, increased some social benefits and opened dialogue, but the measures have failed to quell tensions. Authorities have blamed allies ⁠of ​former leftist president Evo Morales for encouraging the blockades. Government spokesperson Jose Luis Galvez said on Monday that violent groups were undermining democracy. According to economist Gonzalo Chavez, the unrest reflects deeper structural strains as Bolivia faces its worst economic crisis in a generation.

“There are no easy or quick solutions in sight,” said Chavez, adding that Bolivia was caught between the exhaustion of a ⁠state-led economic model and the absence of a viable alternative. Analysts point to global energy shocks linked to the Iran war, which are adding pressure on households in the landlocked country ⁠that increasingly relies on fuel imports.

Market reaction to ⁠the unrest has been muted, with few immediate signs of investor concern. The premium that investors demand to hold Bolivian debt over comparable U.S. Treasuries narrowed in May to its tightest level since at least 2020, LSEG data shows, signaling limited concern over the government's ability to ‌service its debt.