Central Bank of Bolivia

Board of Directors

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BOARD RESOLUTION NO. 018/2019

SUBJECT: MONETARY OPERATIONS MANAGEMENT – APPROVES REPEALING BOARD RESOLUTION NO. 115/2005 IN LIGHT OF THE EXECUTION OF NEW CONTRACTS WITH THE SECURITIES DEPOSITORY ENTITY S.A.

VISTOS (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).
• Law No. 1834 of the Securities Market of March 31, 1998.
• The BCB Statute approved via Board Resolution No. 128/2005 of October 21, 2005, and its subsequent modifications.
• Board Resolution No. 115/2005 of September 20, 2005.
• SANO Agreement No. 212/2005 of October 14, 2005.
• SANO Addendum No. 127/2007 of September 13, 2007.
• Report BCB-GOM-SOMA-INF-2019-8 of February 22, 2019, from the Monetary Operations Management (GOM).
• Report BCB-GAL-SANO-DLBCI-INF-2019-31 of February 25, 2019, from the Legal Affairs Management (GAL).

CONSIDERING:

That the Political Constitution of the State in its article 327 provides that the BCB is a public law institution, with legal personality and its own assets. Within the framework of the State's economic policy, it is the function of the Central Bank of Bolivia to maintain the stability of the internal purchasing power of the currency, to contribute to economic and social development.

That Law No. 1670 in its article 6 establishes that the BCB will execute monetary policy and regulate the quantity of money and credit volume in accordance with its monetary program. To this effect, it may issue, place, and acquire securities and carry out other open market operations. Likewise, in paragraph e) of its article 29, it authorizes the BCB to participate in the issuance, placement, and administration of public debt instruments.

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That article 44 states that the highest authority of the BCB is its Board of Directors, which is responsible for defining its policies, specialized general application regulations, and internal norms; as well as establishing administrative, operational, and financial strategies for the BCB, approving their respective short and medium-term programs. For the monitoring and oversight of their execution, it will have independent information, analysis, and audit services.

That paragraphs a) and q) of article 54 indicate that the BCB Board of Directors has the authority to issue regulations and adopt general decisions that are necessary for the Institution to fulfill the functions, competencies, and powers indicated by this Law and those that are necessary for the fulfillment of its functions.

That Law No. 1834 of the Securities Market of March 31, 1998, in its article 13 determines that the BCB and the General Treasury of the Nation (TGN) will immediately and generally register the securities they issue in the Securities Market Registry.

That in its article 56 it provides that the securities specified in this Law may be represented by book entries under the responsibility of the depository entity.

CONSIDERING:

That through SANO Agreement No. 212/2005 of October 14, 2005, signed between the Central Bank of Bolivia and the Securities Depository Entity of Bolivia S.A., the Dematerialized Issuance and Dematerialization of Public Securities and the Registry of Transfers Emerging from Operations conducted with them were established, along with its SANO Addendum No. 127/2007 of September 13, 2007.

That through Report BCB-GOM-SOMA-INF-2019-8 of February 22, 2019, the GOM proposes to repeal Board Resolution No. 115/2005 dated September 20, 2005, and in light of technical justifications regarding the need to sign a Central Bank Contract and an Administrative Contract, thereby terminating SANO Agreement No. 212/2005 and SANO Addendum No. 127/2007, which will allow updating the regulations and operations for the implementation of new instruments and mechanisms of monetary regulation.

That in Report BCB-GAL-SANO-DLBCI-INF-2019-31, the GAL concludes that the GOM's request to repeal Board Resolution No. 115/2005 is legally appropriate, since with the signing of the contracts proposed by the GOM, the use of new instruments and mechanisms of monetary regulation will be facilitated, which respond to the current characteristics of the securities market, being the competence of the BCB Board of Directors to approve it by simple majority of votes of the members present at the respective meeting, the request in accordance with what is established in article 24 of the Institution's Statute and under the authority of the powers provided in articles 44 and 54 of Law No. 1670.

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That in the aforementioned Report, the GAL recommends that the determination to repeal Board Resolution No. 115/2005 must enter into force from the date of signing the Central Bank Operations Contract and the Administrative Service Contract, as stated in Report BCB-GOM-SOMA-INF-2019-8.

THEREFORE,

THE BOARD OF DIRECTORS OF THE CENTRAL BANK OF BOLIVIA

RESOLVES:

Article 1.- Repeal Board Resolution No. 115/2005 of September 20, 2005, effective from the date of signing the Contract for Central Bank Operations with Securities Represented by Book Entries in the Book Entry Registry System under the responsibility of the Securities Depository Entity of Bolivia S.A. and the Administrative Contract for the Registry and Maintenance of Public Securities for Direct Sale in the Book Entry Registry System.

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

La Paz, February 26, 2019

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