Central Bank of Bolivia

Board of Directors

BOARD RESOLUTION NO. 008/2018

SUBJECT: ECONOMIC POLICY ADVISORY – APPROVES MODIFICATION TO THE EXCHANGE POSITION REGULATION.

VIEWED:

• The Political Constitution of the State promulgated on February 7, 2009.
• Law No. 1670 of October 31, 1995, of the Central Bank of Bolivia (BCB).
• Board Resolution No. 108/2016 of June 14, 2016, which approves the Exchange Position Regulation adapted to Law No. 393.
• The Report from the Economic Policy Advisory BCB-APEC-SIE-INF-2018-02 of January 5, 2018.
• The Report from the Legal Affairs Management BCB-GAL-SANO-DLBCI-INF-2018-6 of January 8, 2018.

CONSIDERING:

• That the Political Constitution of the State in its article 328 provides that the BCB is authorized, in coordination with the economic policy determined by the Executive Branch, to determine and execute monetary policy and execute exchange policy.
• That the BCB, in compliance with what is provided in article 19 of Law No. 1670, has established an Exchange Position Regulation of mandatory compliance by Institutions of the Financial System.
• That article 11 numeral 12) of the BCB Statute establishes that the Board of the Issuing Entity has the authority to determine the exchange regime and the country's exchange policy.
• That the Exchange Position Regulation aims to regulate the exchange position of banking and non-banking financial entities in denominations other than national currency, with the purpose of preserving the stability of the financial system, maintaining necessary control over the aggregated active and passive positions of financial institutions, and promoting the remonetization of the financial system.
• That the Economic Policy Advisory, through Report BCB-APEC-SIE-INF-2018-02, recommends the approval of the modification of article 4 of the Exchange Position Regulation.

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//2. B.R. No. 008/2018

That the Legal Affairs Management, in its Report BCB-GAL-SANO-DLBCI-INF-2018-6 concludes that the proposed modification indicated is legally appropriate, insofar as it does not contravene the current legal framework, being the competence of the BCB Board to consider its approval by two-thirds of the votes of all its members, in accordance with what is provided by subsection o) of article 54 of Law No. 1670 concordant with numeral 29) of article 11 of the BCB Statute.

THEREFORE,

THE BOARD OF DIRECTORS OF THE CENTRAL BANK OF BOLIVIA

RESOLVES:

Article 1.- Modify article 4 of the Exchange Position Regulation according to the following:

IT SAYS:

Article 4 (Exchange Position Limits)

Financial Intermediation Entities may maintain an exchange position according to the following rules:

a) For the sum of ME, MVDOL, OME, the limits are the following:

• A long position up to the equivalent of 60% (SIXTY PERCENT) of the value of accounting equity.
• A short position up to the equivalent of 30% (THIRTY PERCENT) of the value of accounting equity.

b) A long position in MNUFV up to the equivalent of 10% (TEN PERCENT) of the value of accounting equity.

IT MUST SAY:

“Article 4 (Exchange Position Limits)

Financial Intermediation Entities may maintain an exchange position according to the following rules:

a) For the sum of ME, MVDOL, OME, the limits are the following:

• A long position up to the equivalent of 60% (SIXTY PERCENT) of the value of accounting equity.
• A short position up to the equivalent of 40% (FORTY PERCENT) of the value of accounting equity.

b) A long position in MNUFV up to the equivalent of 10% (TEN PERCENT) of the value of accounting equity.”

Article 2.- This partial modification of the Exchange Position Regulation will enter into force starting January 17, 2018.

Article 3.- The Presidency and General Management are charged with the execution and compliance of this Resolution.

La Paz, January 16, 2018

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Pablo Ramos Sánchez
Abraham Pérez Alandia
Gabriel Herbas Camacho
Luis Baudoin Olea
Ronald Polo Rivero
Sergio Velarde Vera