Board Resolution No. 063/2013 Approving the Foreign Exchange Operations Regulation

BOARD RESOLUTION NO. 063/2013 SUBJECT: INTERNATIONAL OPERATIONS MANAGEMENT — APPROVES FOREIGN EXCHANGE OPERATIONS REGULATION.

SEEING: 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. 291 of September 22, 2012, modifying the General State Budget — 2012. Supreme Decree No. 1423 of December 5, 2012. The BCB Statute approved by Board Resolution No. 128/2005 of October 21, 2005, and subsequent modifications. Board Resolution No. 007/2013 of January 8, 2013, which approves the Foreign Exchange Operations Regulation. The Report from the International Operations Management BCB-GOI-INF-2013-14 of June 6, 2013. The Report from the Legal Affairs Management BCB-GAL-SANO-INF-2013-194 of June 7, 2013.

CONSIDERING: That the Political Constitution of the State determines in paragraph I of its Article 326 that the State, through the Executive Branch, will determine the monetary and exchange policy objectives of the country, in coordination with the BCB. Likewise, in numeral 2 of Article 328, it establishes that it is the attribute of the BCB, in coordination with the economic policy determined by the Executive Branch, to execute the exchange policy.

That Law No. 1670 in its Article 19, provides that the BCB will execute the exchange policy, regulating the conversion of the Bolivian in relation to the currencies of other countries and the procedures to determine the exchange rates of the national currency.

That Law No. 291 in its Tenth Additional Provision, creates the Tax on the Sale of Foreign Currency (IVME) and in paragraph II of its Tenth Additional Provision, establishes that in order to guarantee the liquidity of US dollars demanded by the national economy, the BCB must sell said foreign currency to the general public, through its own counters and/or through regulated financial institutions.

That Supreme Decree No. 1423 which regulates the IVME, in its Article 12 establishes that the BCB, in order to guarantee the liquidity of US dollars demanded by the national economy, must sell US dollars to the general public. This sale will be through the BCB's own counters and/or through financial intermediation entities with majority state participation.

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

That the International Operations Management in its Report BCB-GOI-INF-2013-14, recommends approving a new Foreign Exchange Operations Regulation that includes provisions regarding the sale of US dollars to the general public on the same day of the operation.

That according to the Report from the Legal Affairs Management BCB-GAL-SANO-INF-2013-194, in accordance with the attribute conferred by Article 54 item o) of Law 1670, the Board is authorized to approve the BCB Regulations.

THEREFORE, THE BOARD OF DIRECTORS OF THE CENTRAL BANK OF BOLIVIA RESOLVES:

Article 1.- Approve the new Foreign Exchange Operations Regulation, which, as an annex, forms part of this Resolution.

Article 2.- From this date, repeal Board Resolution No. 007/2013, and any provision contrary to this Board Resolution.

Article 3.- The Presidency and the General Management are charged with the execution and compliance of this Resolution.

La Paz, June 11, 2013

[Signatures] Rafael Orellana Hugo Dorado Aranibar

ANNEX FOREIGN EXCHANGE OPERATIONS REGULATION

CHAPTER I OBJECTIVE

Article 1.- (Objective and Scope) The present Regulation aims to govern the procedures for the determination of the Boliviano exchange rate and for the purchase and sale of US dollars (USD) by the Central Bank of Bolivia (BCB) with financial entities and with the general public.

CHAPTER II ON EXCHANGE POLICY

Article 2.- (Objective and Nature of Exchange Policy) The Exchange Policy is directed to consolidate the process of inflation stabilization, promoting, as far as possible, the remonetization of the national economy to preserve the stability of the national financial system and the mitigation of the effects of external shocks. The Ministry of Economy and Public Finance, within the framework of this objective, will determine the nature of the exchange policy, in coordination with the BCB.

CHAPTER III ON THE MONETARY AND EXCHANGE POLICY COMMITTEE

Article 3.- (Attributions of the Monetary and Exchange Policy Committee) Within the framework of what is established in Chapter II of this Regulation, the Monetary and Exchange Policy Committee, constituted in accordance with the BCB Statute, will have the following functions: a) Recommend to the Board modifications to the exchange policy for its coordination with the Ministry of Economy and Public Finance. b) Propose to the Board modifications regarding the modalities of implementation of the exchange policy. c) Determine the daily offer amount in the Auction. d) Determine the period in which USD sales on the same day of the operation will be enabled, the schedule, and the daily amount of said sales.

CHAPTER IV DETERMINATION OF THE EXCHANGE RATE

Article 4.- (Reference Currency for the Exchange Rate) The exchange rate will be determined in relation to the US Dollar (USD).

Article 5.- (Official Selling Exchange Rate) The official selling exchange rate is defined as the minimum adjudication price resulting from the Auction, if in the public sale the USD put up for offer for the session are exhausted. In the event that there is a remainder of the offer, the official selling exchange rate will be the base quotation.

Article 6.- (Buying Exchange Rate) The buying exchange rate is defined as that resulting from subtracting a certain amount in Bolivianos, denominated as "differential", from the official selling exchange rate, which will be established by the BCB Board.

Article 7.- (Validity of the Exchange Rate) The selling and buying exchange rates will enter into force the day after the Auction session and will govern until the day of the next session.

CHAPTER V SALE OF USD THROUGH THE AUCTION

Article 8.- (Auction and its Administration) The Auction will be administered by the International Operations Management of the BCB.

Article 9.- (Periodicity of Auction Sessions) The Auction sessions will be held on all business days.

Article 10.- (Participants in the Auction) Financial entities that maintain a current and reserve account, reserve account, or current account at the BCB may participate in the Auction; this participation may be on their own behalf or on behalf of third parties. The general public may participate in the Auction, provided they maintain accounts in national currency and in USD at a financial entity that has accounts at the BCB.

Article 11.- (Submission of Requests) Requests to participate in the Auction session will be submitted through the means determined by the General Management of the BCB, with details of the amount of USD requested, with a minimum amount of USD 100,000.- (One hundred thousand 00/100 US Dollars) and in multiples of the same amount, the proposed exchange rate, and the general information of the applicant.

Article 12.- (Deadline) Proposals must be presented to the BCB by 15:00 hours. Any modification in the deadline time will be communicated to financial entities by the General Management of the BCB.

Article 13.- (Base Quotation) The Manager of International Operations will inform the President of the BCB of the proposals received in the Auction, who will fix the base quotation for each session.

Article 14.- (Adjudication of USD in the Auction) The base quotation will be communicated by the President of the BCB to the Manager of International Operations, who will instruct that the adjudication of USD proceed in descending order of price, provided that the price of the proposals is greater than or equal to the base quotation, until the offer is exhausted. In the event that the amount of USD offered is not sufficient to meet the proposals received at the same exchange rate, the USD will be adjudicated under the pro-rata system. In this case, the financial entity and the public who had participated in the Auction will be obliged to accept the adjudication of partial amounts.

Article 15.- (Rejection of Requests) Rejected requests and the reason for rejection will be communicated to the financial entities and the public who had participated, upon conclusion of the Auction session.

Article 16.- (Delivery of USD) On the same date of the Auction session, the current and reserve account, reserve account, or current account in national currency of the financial entity will be debited, and on the next business day, the adjudicated USD will be delivered by credit to their current and reserve account, reserve account, or current account in USD.

Article 17.- (Lack of Fund Provision) In the event that the financial entity does not have the resources in national currency in its current and reserve account, reserve account, or current account, by the deadline established in Article 12, its request will be rejected and it will be suspended from participating in the Auction sessions for five (5) business days.

Article 18.- (Dissemination of Auction Results) The results of each Auction session will be disseminated on the day through the BCB WEB page and news agencies.

CHAPTER VI SALE AND PURCHASE OF US DOLLARS (USD)

Article 19.- (Sale of USD) The BCB may sell USD to financial entities and to the general public on the same day at the official selling exchange rate in force, through debit in national currency accounts and credit in USD accounts at financial entities. The sale of USD and other currencies to the public sector will be carried out exclusively through the Ministry of Economy and Public Finance and will be assigned to the official selling exchange rate in force on the date of its operation.

Article 20.- (Purchase of USD) The BCB will buy USD from the public sector and the financial system at the buying exchange rate, crediting Bolivianos in accounts that the entities maintain at the BCB.

CHAPTER VII PURCHASE AND SALE OF US DOLLARS (USD) OF THE FINANCIAL SYSTEM AND EXCHANGE HOUSES WITH THEIR CLIENTS AND USERS

Article 21.- (Maximum Selling Exchange Rate of USD) The entities supervised by the Financial System Supervision Authority (ASFI) and the Exchange Houses will sell USD to their clients and users at an exchange rate not greater than one (1) cent of a Boliviano from the official selling exchange rate of the BCB in force on the date of each operation.

Article 22.- (Minimum Buying Exchange Rate of USD) The entities supervised by the ASFI and the Exchange Houses will buy USD from their clients and users at an exchange rate not less than one (1) cent of a Boliviano from the buying exchange rate of the BCB in force on the date of each operation.

Article 23.- (Coordination with the ASFI) The BCB will coordinate with the ASFI the supervision and control of compliance by the entities of the financial system with what is provided in Articles 21 and 22 of this Regulation.

Article 24.- (Application of Suspensions for Non-Compliance) Once the information from the ASFI regarding non-compliance with these norms is received, the BCB will proceed to suspend the infringing financial entity according to the following detail: i) For the first non-compliance, suspension for 15 calendar days to buy and sell USD to the BCB. ii) For the second non-compliance, suspension for 30 calendar days to buy and sell USD to the BCB and to carry out open market operations (OMA) with the BCB. iii) For the third and successive non-compliances, suspension for 60 days to buy and sell USD to the BCB and to carry out open market operations (OMA) with the BCB.