BOARD OF DIRECTORS

BOARD RESOLUTION NO. 079/2023

SUBJECT: TREASURY MANAGEMENT – MODIFICATION OF THE REGULATION ON THE ADMINISTRATION OF MONETARY MATERIAL.

VIEWING:

• The Political Constitution of the State of February 7, 2009.
• Law No. 1670 of the Central Bank of Bolivia (BCB), dated October 31, 1995, and its modifications.
• The Statute of the Central Bank of Bolivia approved by Board Resolution No. 128/2005 of October 21, 2005, and its modifications.
• Board Resolution No. 106/2021 of September 30, 2021, which approves the Regulation on the Administration of Monetary Material and its modifications.
• Report BCB-GTES-SAMM-DAMM-INF-2023-73 of May 11, 2023, issued by the Treasury Management (GTES).
• Report BCB-GAL-SANO-INF-2023-158 of May 11, 2023, issued by the Legal Affairs Management (GAL).

CONSIDERING:

• That Article 327 of the Political Constitution of the State establishes that the BCB is a public law institution, with legal personality and its own assets, within the framework of the State's economic policy, it has the function of maintaining the stability of the internal purchasing power of the currency, to contribute to economic and social development.
• That Article 1 of Law No. 1670 of the BCB, modified by Article 67, section A3, numeral 1 of Law No. 1864 of June 15, 1998, states that the BCB is a State institution, of public law, of an autonomous nature, of indefinite duration, with its own legal personality and assets and with its 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 powers of general application.
• That Article 10 of Law No. 1670 establishes that the BCB will exercise exclusively and non-delegably the function of issuing the monetary unit of Bolivia, which is the "Boliviano," in the form of banknotes and metallic coins.
• That Article 11 of Law No. 1670 provides that the banknotes and coins issued by the BCB are legal tender throughout the territory of the Plurinational State of Bolivia, with unlimited liberatory power. They will have the denominations, dimensions, designs, and colors

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that its Board of Directors shall determine, which must make their characteristics public. Banknotes must bear the signatures of the President and the General Manager of the BCB and the serial number on both halves of them.

• That Article 13 of Law No. 1670 states that the BCB, banks, and all financial intermediation institutions are obliged to exchange deteriorated or mutilated banknotes, provided that they clearly retain their two signatures and a serial number.
• That Article 30 of Law No. 1670 establishes that all entities of the financial intermediation and financial services system, whose operation is authorized by the Superintendence of Banks and Financial Entities, currently the Financial System Supervision Authority – ASFI, are subject to the normative competence of the BCB.
• That subsections a), m), and o) of Article 54 of Law No. 1670 establish as attributions of the Board of Directors to issue the norms and adopt the general decisions that would be necessary for the BCB to fulfill the functions, competencies, and powers assigned to it by the Law; as well as, to authorize and supervise the printing, issuance, and destruction of banknotes and the minting and withdrawal of coins, within the norms of the Law; and to 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 numerals 11) and 29) of Article 11 of the BCB Statute approved by Board Resolution No. 128/2005 of October 21, 2005, and its modifications, regarding the Attributions of the Board of Directors, states among others, the: "Approve the printing, issuance, and destruction of Boliviano banknotes and coins, and those issued for commemorative and numismatic purposes as well as their denominations, dimensions, designs, and colors, in accordance with Regulations when applicable." As well as, the: "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 Board Resolution No. 106/2021 of September 30, 2021, approves the Regulation on the Administration of Monetary Material.
• That Report BCB-GTES-SAMM-DAMM-INF-2023-73 from GTES concludes that there is a need to modify the Regulation on the Administration of Monetary Material, therefore recommending to the Board of Directors of the BCB the approval of the proposal made.
• That Report BCB-GAL-SANO-DLBCI-INF-2023-158 from GAL concludes that the proposed modifications to the Regulation on the Administration of Monetary Material, proposed by GTES, do not contravene the current legal framework; therefore, recommending to the Board of Directors of the BCB its approval.

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THEREFORE,

THE BOARD OF DIRECTORS OF THE CENTRAL BANK OF BOLIVIA

RESOLVES:

Article 1.- Incorporate into Article 3.- (Abbreviations and definitions) of the Regulation on the Administration of Monetary Material, the following definition:

"Manual for the Selection of Bolivian Banknotes: It is the instrument whose purpose is to establish the selection criteria for "Boliviano" banknotes that the BCB, EIF, ETM, or others provided for in the regulations, must know and apply to determine which banknotes are fit and unfit for circulation."

Article 2.- Incorporate paragraph III into Article 7.- (Classification of Banknotes) of the Regulation on the Administration of Monetary Material, the following text:

"III. In the event of the issuance of a new Manual for the Selection of Bolivian Banknotes, all banknotes deposited by EIFs with the BCB as unfit prior to the issuance thereof, will be rendered unusable by the BCB when they meet the criteria of unfit banknote established according to the parameters of the new Manual."

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

La Paz, May 12, 2023

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