Central Bank of Bolivia

Board of Directors

BOARD RESOLUTION NO. 011/2019

SUBJECT: ECONOMIC POLICY ADVISORY – APPROVES AMENDMENT TO THE FOREIGN EXCHANGE POSITION REGULATION FOR FINANCIAL INTERMEDIATION ENTITIES.

VISTOS:

• 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).
• Law No. 393 on Financial Services of August 21, 2013.
• The BCB Statute approved by Board Resolution No. 128/2005 of October 21, 2005, and its subsequent modifications.
• Board Resolution No. 108/2016 of June 14, 2016, which approves the Foreign Exchange Position Regulation adapted to Law No. 393 and its subsequent modifications.
• The Report from the Economic Policy Advisory BCB-APEC-SIE-INF-2019-14 of January 17, 2019.
• The Report from the Legal Affairs Management BCB-GAL-SANO-DLBCI-INF-2019-9 of January 18, 2019.

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 rate policy.
• That Law No. 1670 in its article 19 states that the BCB will establish the exchange regime and execute exchange rate policy, regulating the conversion of the Boliviano in relation to the currencies of other countries and the procedures to determine the exchange rates of the national currency.
• That the BCB, in compliance with what is provided in article 19 of Law No. 1670, has established a Foreign Exchange Position Regulation of mandatory compliance by the Institutions of the Financial System.

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• 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 exchange rate policy of the country.
• That the Foreign Exchange Position Regulation aims to regulate the exchange position of Financial Intermediation Entities in denominations other than the national currency, with the aim 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-2019-14 recommends the approval of the modification of article 4 of the Foreign Exchange Position Regulation.
• That the Legal Affairs Management, in its Report BCB-GAL-SANO-DLBCI-INF-2019-9 concludes that the Board of the BCB is authorized to approve the modification of article 4 of the Foreign Exchange Position Regulation for FIEs, by two-thirds of the votes of all its members, in accordance with what is provided in subsection o) of article 54 of Law No. 1670 concordant with numeral 29) of article 11 of the BCB Statute, since it is legally procedible as it does not contravene the current legal framework.

THEREFORE,

THE BOARD OF DIRECTORS OF THE CENTRAL BANK OF BOLIVIA

RESOLVES:

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

IT SAYS:

Article 4 (Limits of the Exchange Position)

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 accounting equity value.

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

IT MUST SAY:

“Article 4 (Limits of the Exchange Position)

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 50% (FIFTY PERCENT) of the value of accounting equity.
• A short position up to the equivalent of 50% (FIFTY PERCENT) of the accounting equity value.

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

Article 2.- This partial modification of the Foreign Exchange Position Regulation will enter into force starting from February 4, 2019.

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

La Paz, January 24, 2019

Pablo Ramos Sánchez
Gabriel Herbas Camacho
Sergio Velarde Vera

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Abraham Pérez Alandia
Ronald Polo Rivero
Luis Baudoin Olea