BOARD OF DIRECTORS

BOARD RESOLUTION NO. 025/2023

SUBJECT: INTERNATIONAL OPERATIONS MANAGEMENT – ECONOMIC POLICY ADVISORY – MODIFICATION OF THE FOREIGN EXCHANGE OPERATIONS REGULATION.

VIEWING:

• The Political Constitution of the State, of February 7, 2009.
• Law No. 1670 of October 31, 1995 of the Central Bank of Bolivia (BCB) and its modifications.
• Law No. 331 of December 27, 2012, on the Public Banking Entity.
• Supreme Decree No. 1841 of December 18, 2013.
• The BCB Statute approved by Board Resolution No. 095/2022 of October 6, 2022, and its modifications.
• The Foreign Exchange Operations Regulation approved by Board Resolution No. 063/2013 of June 11, 2013.
• Board Resolution No. 010/2023 of January 10, 2023, which approves the Modification to the Foreign Exchange Operations Regulation.
• The Technical Report from the Economic Policy Advisory (APEC) and the International Operations Management (GOI) BCB-APEC-SADBC-INF-2023-4 of February 1, 2023.
• The Report from the Legal Affairs Management (GAL) BCB-GAL-SANO-INF-2023-27 of February 2, 2023.

CONSIDERING:

That Article 327 of the Political Constitution of the State determines that the BCB is a public law institution, with legal personality and its own assets, which, within the framework of the State's economic policy, has the function of maintaining the internal purchasing power stability of the currency, to contribute to economic and social development.

That numeral 2) of paragraph I of Article 328 of the Political Constitution of the State establishes that the BCB has the authority to execute foreign exchange policy.

That Article 1 of Law No. 1670 establishes that the BCB is a State institution, of public law, autonomous in nature, of indefinite duration, with legal personality and its own assets and with legal domicile in the city of La Paz. It is the sole monetary and exchange authority of the country, with administrative, technical, and financial competence and specialized normative faculties of general application.

That Article 3 of Law No. 1670 provides that the BCB will formulate policies of general application in the matter of foreign exchange for the fulfillment of its object.

That Article 14 of Law No. 1670 establishes that the BCB will ensure the strengthening of International Reserves so as to allow the normal functioning of Bolivia's international payments.

That Article 19 of Law No. 1670 provides that the BCB will execute foreign exchange 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 Article 28 of Law No. 1670 establishes that entities of the Non-Financial Public Sector will carry out their operations with the Central Bank of Bolivia (BCB) through the General Treasury of the Nation (TGN).

That Article 44 of Law No. 1670 establishes that the highest authority of the BCB is its Board of Directors, which is responsible for defining its policies, specialized norms of general application, and internal rules.

That subsections a), c), and o) of Article 54 of Law No. 1670 indicate as attributions of the Board of Directors the following: a) Issue the norms and adopt the general decisions that are necessary for the BCB to fulfill the functions, competencies, and faculties assigned to it by the Law; c) Monitor the execution of monetary, exchange, credit, financial intermediation, international reserves administration, and other policies and regulations corresponding to the BCB in accordance with the Law; and o) Approve, modify, and interpret the Statute and Regulations of the BCB, by two-thirds of the votes of all its members, without the need for any additional administrative act.

That Article 3 of Law No. 331, on the Public Banking Entity, establishes the creation of the Public Banking Entity, as a Public Banking Financial Intermediation Entity in the person of Banco Unión S.A.

That Article 4 of Law No. 331 establishes that the Public Banking Entity will have as its purpose to carry out the financial operations and services of the entire Public Administration at its different levels of government, administering the deposits of non-financial public sector entities on behalf of the Central Bank of Bolivia, for which all of them must maintain their funds in fiscal accounts at the BCB.

That Article 5 of Law No. 331 establishes regarding applicable legislation that the Public Banking Entity will be governed by what is provided in this Law, which will be of preferential application with respect to any other legal provision; the Law that regulates the activity and entities of financial intermediation, the norms issued by the Ministry that exercises the leadership of the National Treasury and Public Credit System, and the norms of the BCB.

That Article 11 of Supreme Decree No. 1841 on the Financial Operations and Services Provided to the Central Bank of Bolivia, states in its paragraph I, subsection c., numeral 4, among others, that the Public Banking Entity will carry out other functions that the BCB may require, within the framework of the Contract signed.

That numeral 1) of Article 10 of the BCB Statute provides that the Board of Directors has the faculty to approve general decisions and issue the norms that are necessary for the BCB to fulfill the functions, competencies, and faculties assigned to it by the Law.

That in virtue of the attributions conferred by numeral 12) of Article 10 of the BCB Statute, the BCB Board of Directors is authorized to determine the exchange regime and foreign exchange policy.

That numeral 30) of the aforementioned Article 10 of the BCB Statute states that the Board of Directors may approve, modify, and interpret the Statute and Regulations of the BCB, by two-thirds of the votes of all its members, without the need for an additional administrative act.

That the Foreign Exchange Operations Regulation governs the procedures for the determination of the Boliviano exchange rate and for the purchase and sale of United States dollars by the BCB with financial entities and with the general public.

That Board Resolution No. 010/2023 of January 10, 2023, approves the Modification to the Foreign Exchange Operations Regulation.

That the Technical Report from APEC and GOI BCB-APEC-SADBC-INF-2023-4 concludes that it is pertinent to propose measures to incentivize the national productive and export sector through the generation of an incentive for exporters to liquidate their foreign currency with the BCB, through Banco Unión, at a competitive exchange rate compared to the national market, recommending to the BCB Board of Directors the approval of the Foreign Exchange Operations Regulation.

That the BCB-GAL-SANO-INF-2023-27 Report concludes that in accordance with Report BCB-APEC-SADBC-INF-2023-27, the proposal to modify the Foreign Exchange Operations Regulation does not contravene any regulatory provision, and is therefore legally procedent, recommending to the BCB Board of Directors its approval.

THEREFORE,

THE BOARD OF DIRECTORS OF THE CENTRAL BANK OF BOLIVIA

RESOLVES:

Article 1. Modify the Title of the Sole Additional Provision of the Foreign Exchange Operations Regulation approved by Board Resolution 063/2013 of June 11, 2013, and modified by Board Resolution 010/2023 of January 10, 2023, with the following text: "First Additional Provision..."

Article 2. Incorporate the Second Additional Provision into the Foreign Exchange Operations Regulation approved by Board Resolution 063/2013 of June 11, 2013, and modified by Board Resolution 010/2023 of January 10, 2023, with the following text:

"Second Additional Provision. Within the framework of Law No. 331 of December 27, 2012, and Supreme Decree No. 1841 of December 18, 2013, the BCB may purchase United States dollars (USD), through the Public Banking Entity (Banco Unión S.A.), generated by the private export sector at exchange rates between the purchase exchange rate and the official selling exchange rate."

Article 3. Incorporate the Third Additional Provision into the Foreign Exchange Operations Regulation approved by Board Resolution 063/2013 of June 11, 2013, and modified by Board Resolution 010/2023 of January 10, 2023, with the following text:

"Third Additional Provision. The Central Bank of Bolivia will carry out international transfers and payments in accordance with its availability of foreign currency in foreign sight funds."

Article 4. This Resolution will enter into force from its approval.

Article 5. The Presidency and the General Management are charged with the compliance of this Resolution.

La Paz, February 2, 2023

SIGNED: ROGER EDWIN ROJAS ULO, Oscar Ferrufino Morro, Gumercindo Héctor Pino Guzmán, Diego Alejandro Pérez Cueto Eulert.