Central Bank of Bolivia

Board of Directors

BOARD RESOLUTION NO. 079/2017

SUBJECT: FINANCIAL ENTITIES MANAGEMENT – ESTABLISHES CALCULATION OF RESERVE REQUIREMENT HELD FROM MAY 30 TO JUNE 1, 2017.

SEEN:

• The Political Constitution of the State promulgated on February 7, 2009.
• Law No. 1670 of October 31, 1995.
• The Statute of the Central Bank of Bolivia approved by Board Resolution No. 128/2005 of October 21, 2005.
• The Legal Reserve Regulation approved by Board Resolution No. 069/2017 of May 22, 2017.
• The Report from the Financial Entities Management BCB-GEF-SASF-DIF-INF-2017-17 of June 5, 2017.
• The Report from the Legal Affairs Management BCB-GAL-SANO-DLBCI-INF-2017-137 of June 6, 2017.

CONSIDERING:

That the Political Constitution of the State in its article 328 provides that the Central Bank of Bolivia (BCB) is authorized, in coordination with the economic policy determined by the Executive Branch, to determine and execute monetary policy and execute exchange rate policy.

That Law No. 1670 in its article 7 provides that the BCB may establish legal reserves of mandatory compliance by financial intermediation entities. Their composition, amount, method of calculation, characteristics, and remuneration shall be established by the BCB Board of Directors, by an absolute majority of votes.

That the BCB, in compliance with what is provided in article 19 of Law No. 1670, has established a Legal Reserve Regulation of mandatory compliance by Institutions of the Financial System.

That the BCB Statute in article 11 numeral 7) states that it is the faculty of the Board of Directors to establish, by an absolute majority of votes, legal reserves of mandatory compliance by Financial Intermediation Entities and approve their composition, amount, calculation, characteristics, forms of administration, custody, and remuneration in accordance with the Regulation.

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That the Legal Reserve Regulation in Title V establishes the creation of the Fund for Credits Destined to the Productive Sector and Social Housing (CPVIS Fund) with resources released from the Foreign Currency Liquid Asset Requirement Fund (RAL-ME Fund).

That with the application of the new Legal Reserve Regulation effective from May 22, 2017, some differentiation parameters for the registration of analytical accounts were modified, affecting the calculation and consequently resulting in a higher amount released from the RAL-ME Fund in favor of the CPVIS Fund on May 30, 2017, which generated involuntary reserve shortfalls in foreign currency in certain financial intermediation entities during that period.

That the Report BCB-GEF-SASF-DIF-INF-2017-17 concludes that financial intermediation entities could have involuntary reserve shortfalls due to the excess transfer from the RAL-ME Fund to the Fund for Credits Destined to the Productive Sector and Social Housing, and that the calculation of the reserve requirement held in foreign currency titles must be amended.

That according to the Report BCB-GAL-SANO-DLBCI-INF-2017-137, it is established that the approval of the calculation of the reserve requirement held from May 30 to June 1, 2017, is legally appropriate, being the competence of the BCB Board of Directors to consider its approval in accordance with what is established in article 54 subsections a) and i) of Law No. 1670, and articles 6 numerals 1) and 3), 11 numerals 1), 24, and 26 of the Statute of the Issuing Entity.

THEREFORE,

THE BOARD OF DIRECTORS OF THE CENTRAL BANK OF BOLIVIA

RESOLVES:

Article 1.- It is established that for the days May 30 and 31 and June 1, 2017, the calculation of the legal reserve requirement held in foreign currency titles will also consider the amount of resources transferred in excess from the RAL-ME Fund to the Fund for Credits Destined to the Productive Sector and Social Housing.

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

La Paz, June 6, 2017

Pablo Ramos Sánchez

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Ronald Polo Rivero
Abraham Pérez Alandia
Sergio Velarde Vera