Board Resolution No. 043/2020

BOARD RESOLUTION NO. 043/2020 SUBJECT: TREASURY MANAGEMENT – MODIFICATION OF THE REGULATIONS ON THE ADMINISTRATION OF CURRENCY MATERIAL

HAVING SEEN: The Political Constitution of the State, of February 7, 2009. Law No. 1670, of October 31, 1995, of the Central Bank of Bolivia. The Statute of the Central Bank of Bolivia approved by Board Resolution No. 128/2005, of October 21, 2005, and its modifications. The Regulations on the Administration of Currency Material, approved by Board Resolution No. 093/2018, of July 24, 2018, modified by Board Resolutions No. 133/2018, of September 18, 2018, and No. 083/2019, of July 9, 2019. Technical Report BCB-GTES-SOMM-DOMM-INF-2020-34 of March 20, 2020. Legal Report BCB-GAL-SANO-DLBCI-INF-2020-30 of March 23, 2020.

CONSIDERING:

That articles 327 and 328 of the Political Constitution of the State determine that the BCB is a public law institution, which, in coordination with the economic policy determined by the Executive Branch, has the authority to determine and execute monetary policy.

That articles 1 and 3 of Law No. 1670 and articles 2 and 6 of the BCB Statute establish that the Issuing Entity is an institution of public law of the State that has the power to issue specialized normative provisions of general application and formulate policies in monetary matters.

That article 30 of Law No. 1670 establishes that all financial entities are subject to its regulatory competence.

That article 67 of the BCB Statute determines that the Treasury Management has as its objective to establish the requirements for the acquisition, distribution, and destruction of currency material and its administration.

That article 1 of the Regulations on the Administration of Currency Material establishes that said Regulations have as their objective to regulate the deposit, administration, and withdrawal of currency material resulting from operations carried out by Financial Intermediation Entities (EIF) holders of Current and Reserve Accounts or Reserve Accounts, as well as the receipt of cash deposits destined for fiscal accounts.

That article 4, paragraph II of the Regulations on the Administration of Currency Material establishes that with the purpose of guaranteeing the circulation of new and good condition banknotes of 10 and 20 Bolivianos, the EIF can only deposit unusable banknotes of the mentioned denominations in the BCB.

That the single transitional provision of the Regulations on the Administration of Currency Material establishes that the EIF may exceptionally deposit usable banknotes of 10 and 20 Bolivianos from July 15, 2019, until March 31, 2020.

That the Treasury Management, through Report BCB-GTES-SOMM-DOMM-INF-2020-34, concludes: “As has been explained, although with the application of the modification to the Regulations on the Administration of Currency Material through RD No. 83/2019, 43% of the usable banknotes of smaller denominations that the EIF had stored as of June 30, 2019, were received, by the end of 2019 they still held 92,068 packages, so ASOBAN expressed in various meetings with BCB executives the need to extend the deadline for the deposit of usable banknotes of smaller denominations in the Issuing Entity. (…) In this sense, in order to guarantee the recirculation of usable banknotes of smaller denominations stored in the vaults of the EIF and to meet the demand of ASOBAN, it is proposed to modify the Regulations on the Administration of Currency Material, extending the validity and modifying the Transitional Provision that was approved through RD No. 83/2019 as stated. (…)”.

That the Legal Affairs Management, through Report BCB-GAL-SANO-DLBCI-INF-2020-30, concludes that: “(…) within the framework of what is stated in Report BCB-GTES-SOMM-DOMM-INF-2020-34, the modification proposed by the GTES to the Regulations on the Administration of Currency Material does not contravene the legal order, being therefore legally appropriate and corresponding to the BCB Board to consider its approval in accordance with what is established in article 54, items a) and o) of Law No. 1670 and article 11, numbers 1) and 29) of the Statute of the Issuing Entity.”.

THEREFORE,

THE BOARD OF DIRECTORS OF THE CENTRAL BANK OF BOLIVIA

RESOLVES:

Article 1.- Modify the Single Transitional Provision of the Regulations on the Administration of Currency Material as follows:

SAYS: “Single Transitional Provision.- Exceptionally, the EIF may deposit usable banknotes of 10 and 20 Bolivianos from July 15, 2019, until March 31, 2020. To deposit these banknotes, the EIF must withdraw from the BCB by the next business day at the latest, an equivalent amount in usable banknotes of 50 and 100 Bolivianos, prior scheduling and express authorization of the Treasury Management of the BCB, for which the application of paragraph II of article 4 of these Regulations is exempted.”

SHOULD SAY: “Single Transitional Provision.- Exceptionally, the EIF may deposit usable banknotes of 10 and 20 Bolivianos from April 1, 2020, until September 30, 2020, only in BCB vaults in the city of La Paz. To deposit these banknotes, the EIF must withdraw from the BCB by the next business day at the latest, an equivalent amount in usable banknotes of 50 and 100 Bolivianos, prior scheduling and express authorization of the Treasury area of the BCB, for which the application of paragraph II of article 4 of these Regulations is exempted.”

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

La Paz, March 24, 2020

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Guillermo Aponte Reyes Ortiz

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Armando Pinell Siles Walter Morales Carrasco

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Alejandro Banegas Rivero José Gabriel Espinoza Yañez