BOARD OF DIRECTORS

BOARD RESOLUTION NO. 086/2024

SUBJECT: MONETARY OPERATIONS MANAGEMENT - APPROVING THE GRANTING OF AN EXCEPTIONAL LIQUIDITY CREDIT TO THE GENERAL TREASURY OF THE NATION UNDER LAW NO. 1670 - 2024 MANAGEMENT.

VIEWING:

The Political Constitution of the State of February 7, 2009.
Law No. 1670 of October 31, 1995, of the Central Bank of Bolivia (BCB) and its modifications.
The BCB Statute, approved by Board Resolution No. 095/2022 of October 6, 2022.
The Regulation for the Contracting of Liquidity Credits, approved by Ministerial Resolution No. 021 of January 25, 2023.
The Regulation for the Approval of Credits to the Public Sector under Law No. 1670, approved via Board Resolution No. 110/2019 of August 27, 2019.
The Monetary Program and Financial Fiscal Program 2024, approved on January 29, 2024 by the BCB.
The Execution Decision of the 2024 Financial Fiscal Program signed on January 30, 2024, between the Ministry of Economy and Public Finance (MEFP) and the BCB.
Note MEFP/VTCP/DGCP/UEPS/No. 341/2024 of June 28, 2024, from the MEFP.
Report BCB-APEC-SMF-INF-2024-33 of July 1, 2024, from the Economic Policy Advisory (APEC).
Report BCB-GOM-SOSP-DCE-INF-2024-43 of July 1, 2024, from the Monetary Operations Management (GOM).

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Report BCB-GAL-SANO-DLBCI-INF-2024-258 of July 1, 2024, from the Legal Affairs Management (GAL).

CONSIDERING:

That Article 306 of the Political Constitution of the State establishes that the Bolivian economic model is plural and oriented towards improving the quality of life and the good living of all Bolivians.
That paragraph I of Article 326 of the Political Constitution of the State determines that the State, through the Executive Branch, will determine the objectives of the country's monetary and exchange rate policy in coordination with the BCB.
That Article 327 of the Fundamental Law establishes that the BCB is a public law institution, with legal personality and its own assets, and within the framework of the State's economic policy, it is the function of the BCB to maintain the stability of the internal purchasing power of the currency to contribute to economic and social development.
That Article 1 of Law No. 1670 establishes that the BCB is a State institution, of public law, autarkic in nature, of indefinite duration, with its own legal personality and assets, and with legal domicile in the city of La Paz, being the sole monetary and exchange rate authority of the country, with administrative, technical, and financial competence and specialized normative faculties of general application, in the manner and with the scope established in the Law.
That subsection b) of Article 22 of the aforementioned Law provides that the BCB may not grant credit to the Public Sector nor incur contingent liabilities in its favor, and exceptionally may do so in favor of the National Treasury with the favorable vote of two-thirds of the members present at a meeting of its Board of Directors, to attend to temporary liquidity needs within the limits of the Monetary Program.
That Article 23 of Law No. 1670 determines that the operations provided for in Article 22 will be documented in all cases through negotiable public debt securities

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issued by the National Treasury, which in the case provided for in subsection b) will have a maximum term of one year.

That Article 44 of the aforementioned legal body states that the Board of Directors is responsible for defining its policies, specialized norms of general application, and internal rules; as well as establishing administrative, operational, and financial strategies, approving their respective short and medium-term programs.
That subsections a) and j) of Article 54 of the aforementioned Law indicate as attributions of the BCB Board of Directors to issue norms and adopt general decisions that are necessary for the Issuing Entity to fulfill the functions, competencies, and faculties assigned to it by the Law, as well as to set the interest rate of the credits granted by the BCB.
That the BCB Statute in numerals 1) and 10) of its Article 10 establishes that the Board of Directors of the Issuing Entity has the attribute to approve general decisions and issue the norms that are necessary for the BCB to fulfill the functions, competencies, and faculties assigned to it by the Law, as well as to approve by two-thirds of the votes of the members present, credits to the General Treasury of the Nation to attend to temporary liquidity needs, within the limits of the Monetary Program.
That paragraph II of Article 26 of the Statute determines that every project of Board Resolution must be motivated and justified by a Technical Report from the Management or Managements to which the subject matter of the Resolution corresponds, and by a Report from the Legal Affairs Management. These reports must be issued to the Board of Directors through the General Management with its recommendation.
That Article 7 of the Regulation for the Contracting of Liquidity Credits approved by Ministerial Resolution No. 021/2023 regulates the Negotiation and Contracting of credits requested by the MEFP.
That the Regulation for the Approval of Credits to the Public Sector under Law No. 1670, approved by Board Resolution No. 110/2019, aims to regulate Articles 22 and 23 of Law No. 1670, which establish the requirements and procedures for the approval of credits to the Public Sector.

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That said Regulation, in its Article 10, establishes the requirements for the consideration of the credit for temporary liquidity needs.
That in its Article 11 it states that upon receipt of the credit request and the documentation established in Article 10, prior to consideration by the Board of Directors, the President of the BCB will request: i) Technical Report to the GOM specifying the outstanding debt balance as of the date of the request, future payment maturities of the TGN to the BCB, and suitability of the public value offered to back the operation; ii) report to the GAL regarding compliance with regulations and presentation of the required documentation; iii) Report to the APEC considering the impact of said credit on the Monetary Program that is part of the Execution Decision of the Fiscal-Financial Program that is annually subscribed by the highest authorities of the BCB and the MEFP.
That in its Article 12 it establishes the financial conditions, where the Board of Directors will set the interest rates and term considering, as a reference, the prevailing public security yields in the market in either of the two currencies, in relation to the credit request of the MEFP.
That in its Article 13 it provides that the BCB Board of Directors will consider the Reports presented by the areas, and if appropriate, approve the credit by the favorable vote of two-thirds of its members present at a Board of Directors session and for this effect will issue an express Resolution.
That Article 14 of the aforementioned Regulation establishes that the Board of Directors Resolution will approve the granting of the Credit and the Public Credit Contract between the MEFP and the BCB.
That the Execution Decision of the 2024 Financial Fiscal Program provides for net liquidity credits (gross credit minus amortizations) for 2024.
That the MEFP via Note MEFP/VTCP/DGCP/UEPS/No. 341/2024, under subsection b) of Article 22 of Law No. 1670, requests the granting of a liquidity credit with the following characteristics: i) amount and currency Bs16,500,000,000.00 (Sixteen Billion Five Hundred Million 00/100 Bolivianos), ii) term: 1 year, iii) principal payment: at maturity,

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iv) interest payment: at maturity, v) backing value: Negotiable Treasury Bonds. To this effect, in compliance with what is established in the "Regulation for the Approval of Credits to the Public Sector under Law No. 1670", it sends the payment plan, disbursement schedule, and monthly cash flow of the TGN projected, including repayments to the BCB.

That the GOM via Technical Report BCB-GOM-SOSP-DCE-INF-2024-43, concludes that the Liquidity Credit request made by the Ministry of Economy and Public Finance to the General Treasury of the Nation for the 2024 management for an amount of Bs16,500,000,000.00 (Sixteen Billion Five Hundred Million 00/100 Bolivianos), falls within what is established in the Regulation for the Approval of Credits to the Public Sector, approved via Board Resolution No. 110/2019 and recommends that the BCB Board of Directors approve the financial conditions of the credit detailed in the cited Technical Report.
That the APEC via Report BCB-APEC-SMF-INF-2024-33, concludes that the Monetary Program and Financial Fiscal Program 2024 approved on January 29, 2024, the "Execution Decision of the 2024 Financial Fiscal Program" and the "Schedule of the BCB liquidity credit to the TGN" contemplate a liquidity credit of up to Bs16,500 million, in the month of July; therefore, it recommends to the BCB Board of Directors to approve the liquidity credit requested by the MEFP.
That the GAL via Report BCB-GAL-SANO-DLBCI-INF-2024-258, concludes that the public sector credit request to attend to temporary liquidity needs, made by the Ministry of Economy and Public Finance via Note MEFP/VTCP/DGCP/UEPS/No. 341/2024 of June 28, 2024, is legally appropriate and falls within what is provided for in subsection b) of Article 22 of Law No. 1670; recommending its consideration by the BCB Board of Directors, for its approval with the favorable vote of at least two-thirds of the members present, by express resolution and authorization to the President of the BCB for the signing of the respective contract.

THEREFORE,

THE BOARD OF DIRECTORS OF THE CENTRAL BANK OF BOLIVIA

RESOLVES:

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Article 1.- Within the framework of what is established in subsection b) of Article 22 and Article 23 of Law No. 1670 and in accordance with the Monetary Program and Financial Fiscal Program 2024, approve the granting of a Liquidity Credit in favor of the TGN – 2024 Management, represented by the Ministry of Economy and Public Finance, under the following terms and conditions:

Concept	Detail
Amount:	Bs16,500,000,000.00 (Sixteen Billion Five Hundred Million 00/100 Bolivianos).
Currency:	Bolivianos.
*Term ():**	1 year.
Interest Rate:	3.95% annual.
Payment Frequency:	Annual for principal and interest.
Guarantee:	Negotiable Treasury Bonds – Amortizable.

(*) The term is calculated from the first disbursement

Article 2.- Authorize the Acting President of the BCB to sign the Contract with the Ministry of Economy and Public Finance under the terms of this Resolution.

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

La Paz, July 2, 2024

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

Board Resolution No. 086/2024