Central Bank of Bolivia

Board of Directors

BOARD RESOLUTION NO. 013/2018

SUBJECT: MONETARY OPERATIONS MANAGEMENT - APPROVES MODIFICATIONS TO THE OPEN MARKET OPERATIONS REGULATION

VIEWING:

• Law No. 1670 of October 31, 1995 of the Central Bank of Bolivia (BCB).
• The BCB Statute approved by Board Resolution No. 128/2005 of October 21, 2005 and its subsequent modifications.
• The Open Market Operations (OMA) Regulation, approved by Board Resolution No. 149/2015 of August 25, 2015 and its modifications.
• Report No. E 14/S 17 from the Internal Audit Management, dated December 19, 2017.
• Report BCB-GOM-SOMA-INF-2018-6 of January 16, 2018, from the Monetary Operations Management.
• Report BCB-GAL-SANO-DLBCI-INF-2018-11 of January 19, 2018, from the Legal Affairs Management.

CONSIDERING:

• That Article 6 of Law No. 1670 empowers the BCB to execute monetary policy and regulate the quantity of money and the volume of credit according to its monetary program, being able to issue, place, and acquire securities and carry out other open market operations for this purpose.
• That in virtue of the attributions conferred by subsections a), d), and o) of Article 54 of Law No. 1670 and items 1), 4), and 29) of Article 11 of the BCB Statute, the BCB Board of Directors is empowered to issue norms and adopt general decisions so that the BCB fulfills the functions, competencies, and powers assigned by Law, as well as to issue norms for the open market operations carried out by the BCB and approve the BCB Regulations, by two-thirds of the votes of all its members.
• That Article 4 of the OMA Regulation states that the BCB Board of Directors defines monetary policies in general and open market operation policies in particular. Likewise, in its Article 13, it empowers the BCB Board of Directors to authorize other mechanisms to carry out open market operations.
• That Report No. E 14/S 17 from the Internal Audit Management, dated December 19, 2017, in its point 4 AUDIT FINDINGS, item 4.1 states that

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//2. B.D. No. 013/2018

an error in the citation was detected in the modification of Article 13 of the Open Market Operations Regulation, carried out through B.D. No. 041/2017, which included another paragraph VI in the cited article, when the correct inclusion was a paragraph VII. Likewise, recommendation R.01 of the aforementioned Report No. E 14/S 17 recommends to the Acting President of the BCB to instruct the General Management that the Monetary Operations Management manage the modification of the Open Market Operations Regulation, regarding the correction of paragraph VI of Article 13, approved with B.D. No. 041/2017 of March 28, 2017.

That Report BCB-GOM-SOMA-INF-2018-6 from the Monetary Operations Management recommends to the BCB Board of Directors approve the modification in the numbering of the last paragraphs of Article 13 of the Open Market Operations Regulation, approved through B.D. No. 149/2015 dated August 25, 2015, in order to implement Recommendation R.01 of Report No. E 14/S 17.

That Report BCB-GAL-SANO-DLBCI-INF-2018-11 from the Legal Affairs Management establishes that the proposal for modification of the Open Market Operations Regulation made by the GOM is legally appropriate.

THEREFORE,

THE BOARD OF DIRECTORS OF THE CENTRAL BANK OF BOLIVIA

RESOLVES:

Article 1.- Modify Article 13 of the Open Market Operations Regulation in the following terms.

IT SAYS:

Article 13 (Operational Mechanisms).
OMA may be carried out through operational mechanisms authorized by the BCB Board of Directors, among which are:
(...)
VI. Exchange of DPF for Direct Sale Securities. It is a mechanism by which the BCB acquires DPF in dollars that natural persons maintain in the financial system and delivers in consideration BCB Bolivianization Bonds.
VII. Other Mechanisms. The BCB Board of Directors may authorize the execution of OMA with mechanisms different from those previously established.

IT MUST SAY:

“Article 13 (Operational Mechanisms).
OMA may be carried out through operational mechanisms authorized by the BCB Board of Directors, among which are:
(...)
VII. Exchange of DPF for Direct Sale Securities. It is a mechanism by which the BCB acquires DPF in dollars that natural persons maintain in the financial system and delivers in consideration BCB Bolivianization Bonds.
VIII. Other Mechanisms. The BCB Board of Directors may authorize the execution of OMA with mechanisms different from those previously established.”

Article 2.- The Presidency and the General Management are charged with the execution and compliance of this Resolution.

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La Paz, January 23, 2018

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