BOARD OF DIRECTORS

BOARD RESOLUTION NO. 042/2024

SUBJECT: ECONOMIC POLICY ADVISORY AND FINANCIAL ENTITIES MANAGEMENT – MODIFY THE FOREIGN EXCHANGE POSITION REGULATION FOR FINANCIAL INTERMEDIATION ENTITIES.

VIEWING:

• The Political Constitution of the State (CPE) of February 7, 2009.
• Law No. 1670 of October 31, 1995, of the Central Bank of Bolivia (BCB) and its modifications.
• Board Resolution No. 108/2016 of June 14, 2016, and its modifications.
• Board Resolution No. 095/2022 of October 6, 2022, which approves the Statute of the BCB.
• Report BCB-APEC-SADBC-INF-2024-13 of March 22, 2024, issued by the Economic Policy Advisory (APEC) and the Financial Entities Management (GEF).
• Report BCB-GAL-SANO-DLBCI-INF-2024-101 of March 25, 2024, issued by the Legal Affairs Management (GAL).

CONSIDERING:

• That the Political Constitution of the State in its Article 327 determines that the BCB has the function of maintaining the stability of the internal purchasing power of the currency to contribute to economic and social development.
• That Article 328 of the Political Constitution of the State states that the BCB, in coordination with the economic policy determined by the Executive Branch, in addition to those indicated by law, has among its attributes to determine and execute monetary policy, execute exchange rate policy, regulate the payment system, authorize the issuance of currency, and administer international reserves.

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• By two-thirds vote of all its members, without the need for an additional administrative act.
• That items 1), 12), and 30) of Article 10 of the BCB Statute determine that the Board of Directors of the Issuer has the attributes to approve general decisions and issue the norms that are necessary for the BCB to fulfill the functions, competencies, and powers assigned to it by Law; determine the exchange rate regime and exchange rate policy, and approve, modify, and interpret the Regulations of the BCB.
• That Articles 24 and 26 of the aforementioned Statute refer that resolutions and decisions of the Board of Directors are adopted by simple majority of votes of the members present in a meeting, except in cases where Law No. 1670 or this Statute require qualified majorities, and the Board of Directors pronounces itself on matters within its competence through Resolutions. It may also do so through decisions that will be expressly recorded in the Minutes. Likewise, every draft Board Resolution must be motivated and justified by a technical report from the Management or Managements to whom the subject matter of the Resolution corresponds, and by a report from the GAL. These reports must be sent to the Board of Directors by the General Management with its recommendation.
• That the Foreign Exchange Position Regulation for Financial Intermediation Entities, approved by Board Resolution No. 108/2016 of June 14, 2016, and its modifications, aims to regulate the foreign exchange position of Financial Intermediation Entities in denominations other than national currency, in order to preserve the stability of the financial system, maintain the necessary control over the aggregated active and passive positions of the FIEs, and promote the remonetization of the financial system.
• That Report BCB-APEC-SADBC-INF-2024-13, issued by APEC and GEF, concludes and recommends to the BCB Board of Directors the approval of the modification to the Foreign Exchange Position Regulation, with the object of maintaining the stability of the financial system and maintaining the necessary control over the aggregated active and passive operations of the FIEs.

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• That Report BCB-GAL-SANO-DLBCI-INF-2024-101, GAL concludes that from the review of the antecedents and applicable regulations, as well as the analysis developed, it is concluded that the proposal for modification to the Foreign Exchange Position Regulation for Financial Intermediation Entities, proposed by APEC and GEF, does not contravene the current legal order; therefore, it is legally appropriate, recommending to the BCB Board of Directors its approval.

THEREFORE,

THE BOARD OF DIRECTORS OF THE CENTRAL BANK OF BOLIVIA,

RESOLVES:

Article 1.- Modify Article 4 (Limits of the Exchange Position) of the Foreign Exchange Position Regulation for Financial Intermediation Entities, with the following text:

“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, and OME, the limits are as follows:

• A long position up to the equivalent of 40% (FORTY PERCENT) of the value of net equity. FIEs whose net equity value registers a negative value will automatically be in breach of the Regulation.
• A short position up to the equivalent of 50% (FIFTY 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”.

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Article 2.- This modification of the Foreign Exchange Position Regulation for Financial Intermediation Entities will enter into force starting from April 8, 2024.

Article 3.- Financial Intermediation Entities that, at the time this modification enters into force, have a long position above what is established must adapt until April 30, 2024. Once this period has elapsed, they will be subject to the measures established in Article 6 of the “Foreign Exchange Position Regulation for Financial Intermediation Entities”.

Article 4.- The Presidency and the General Management are entrusted with the compliance of this Resolution.

La Paz, March 26, 2024

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