BOARD OF DIRECTORS

BOARD RESOLUTION NO. 097/2023

SUBJECT: INTERNATIONAL OPERATIONS MANAGEMENT – MODIFY THE FOREIGN EXCHANGE OPERATIONS REGULATION.

VIEWED:

• The Political Constitution of the State of February 7, 2009 (CPE).
• Law No. 1670 of October 31, 1995, of the Central Bank of Bolivia (BCB) and its modifications.
• Law No. 1503 of May 5, 2023, on the Purchase of Gold intended to strengthen International Reserves.
• The BCB Statute approved by Board Resolution No. 095/2022 of October 6, 2022.
• The Foreign Exchange Operations Regulation, approved by Board Resolution No. 063/2013 of June 11, 2013, and its modifications.
• Board Resolution No. 071/2023 of May 9, 2023, which approves the Regulation for the Administration of International Reserves.
• Technical Report BCB-GOI-SOEXT-DOCC-INF-2023-32 of July 3, 2023, from the International Operations Management (GOI).
• Legal Report BCB-GAL-SANO-INF-2023-235 of July 3, 2023, from the Legal Affairs Management (GAL).

CONSIDERING:

That Article 326 of the Political Constitution of the State establishes that the State, through the Executive Branch, will determine the objectives of the country's monetary and exchange policy, in coordination with the Central Bank of Bolivia, and that public transactions in the country

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shall be carried out in national currency.

That Article 327 of the Fundamental Law determines that the BCB is a public law institution, with legal personality and its own assets, which, within the framework of the State's economic policy, has the function of maintaining the stability of the internal purchasing power of the currency, to contribute to economic and social development.

That numeral 2) of paragraph I of Article 328 of the CPE establishes that the BCB has the authority to execute exchange policy.

That Article 1 of Law No. 1670, modified by Article 64, section A3, numeral 1) of Law No. 1864 of June 15, 1998, on Property and Popular Credit, establishes that the BCB is a State institution, of public law, of an autarkic nature, of indefinite duration, with its own legal personality and assets and with 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 regulatory powers of general application.

That Articles 2, 3, and 4 of that same legal body provide that the object of the BCB is to seek the stability of the internal purchasing power of the national currency, and it must formulate policies of general application in the matter of exchange and the payment system for the fulfillment of its object, and the Issuing Entity shall take into account the Government's economic policy, within the framework of this Law, when formulating its policies.

That Articles 14 and 15 of the aforementioned Law establish that the BCB must ensure the strengthening of International Reserves so as to allow the normal functioning of Bolivia's international payments, and said reserves are constituted by one or more of the following assets, in accordance with international order norms:

a) Physical gold.

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

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That Article 44 of Law No. 1670 establishes that the highest authority of the BCB is its Board of Directors, which is responsible for defining its policies, specialized regulations of general application, and internal rules.

That subsections a), c), and o) of Article 54 of Law No. 1670 indicate the following attributions of the Board of Directors:

a) Issue the rules and adopt the general decisions that are necessary for the BCB to fulfill the functions, competencies, and powers assigned to it by Law;

c) Monitor the execution of monetary, exchange, credit, financial intermediation, administration of International Reserves, and other policies and regulations corresponding to the BCB in accordance with the Law;

and o) 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 through Article 1 of Law No. 1503, the BCB is authorized to purchase gold from the domestic market to strengthen International Reserves and to carry out financial operations with International Reserves in gold in international markets.

That Articles 3 and 4 of the same legal body authorize the BCB to buy gold as one more participant in the domestic market, from individuals and legal entities, public and private, legally established, registered, and authorized by competent entities, that participate in the commercialization of gold, paying in national currency, taking as a base the price of the international quotation of gold, under competitive conditions and in accordance with regulations issued by the Issuing Entity.

That the Sole Final Provision of Law No. 1503 establishes that within the framework of Articles 327 and 328 of the Political Constitution of the State, the BCB, with the objective of complying with its constitutional mandate, is empowered to apply what is provided in Law No. 1670 of October 31, 1995, of the Central Bank of Bolivia and its modifications, which is sufficient for the development of its functions, without requiring further provisions than said law.

That numerales 1) and 3) of Article 5 of the BCB Statute provide that its Board of Directors has regulatory competence to issue specialized rules in the fields assigned by Law and technical competence for the formulation of policies and the application of

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instruments that allow it to fulfill its object.

That numerales 1), 6), 12), and 30) of Article 10 of the BCB Statute provide that the Board of Directors has the attributions to approve general decisions and issue the rules that are necessary for the BCB to fulfill the functions, competencies, and powers assigned to it by Law, approve the policy and rules for the administration of International Reserves, as well as monitor their execution, determine the exchange regime and exchange policy, as well as 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 paragraph I of Article 24 of said norm provides that resolutions and decisions of the Board of Directors are adopted by a simple majority of votes of its members present in a meeting, except in cases where Law No. 1670 or the BCB Statute require qualified majorities.

That paragraphs I and II of Article 26 of the BCB Statute stipulate that the Board of Directors pronounces itself on matters within its competence through resolutions. It may also do so through decisions that shall be expressly recorded in the Minutes. Likewise, every draft resolution of the Board of Directors must be motivated and justified by a technical report from the Management or Managements to which the matter subject to the resolution corresponds, and by a report from the Legal Affairs Management. These reports shall be sent to the Board of Directors by the General Management with its recommendation.

That the Foreign Exchange Operations Regulation and its modifications have the object of regulating the procedures for the determination of the exchange rate of the Boliviano and for the purchase and sale of United States dollars by the BCB with financial entities and with the general public.

That by Board Resolution No. 071/2023 of May 9, 2023, which approved the Regulation for the Administration of International Reserves, which establishes the structure and composition of International Reserves.

That Technical Report BCB-GOI-SOEXT-DOCC-INF-2023-32 from the GOI concludes that it is necessary to effect the modification to the Foreign Exchange Operations Regulation, through

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which it is provided that the BCB will pay in national currency at the official selling exchange rate, recommending to put before the Board of Directors of the BCB the approval of the proposal to modify the Regulation.

That Legal Report BCB-GAL-SANO-DLBCI-INF-2023-235 concludes that in accordance with Report BCB-GOI-SOEXT-DOCC-INF-2023-32, the GOI's proposal aims to include an Additional Fifth Provision in the Foreign Exchange Operations Regulation, by which it intends to buy gold in the domestic market to strengthen International Reserves, taking as a base the price of the international quotation of gold and the official selling exchange rate of the United States dollar, for its payment in national currency; which does not contravene any regulatory provision, and is therefore legally viable; recommending to the Board of Directors of the BCB to approve the modification of the Foreign Exchange Operations Regulation.

THEREFORE,

THE BOARD OF DIRECTORS OF THE CENTRAL BANK OF BOLIVIA,

RESOLVES:

Article 1.- Incorporate the Additional Fifth Provision into the Foreign Exchange Operations Regulation approved by Board Resolution No. 063/2013 of June 11, 2013, and its modifications, with the following text:

"Additional Fifth Provision. Within the framework of Law No. 1503 of May 5, 2023, the BCB will purchase gold in the domestic market, to strengthen International Reserves, taking as a base the price of the international quotation of gold and the official selling exchange rate of the United States dollar, for its payment in national currency."

Article 2.- This Resolution shall enter into force from the date of its approval.

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

La Paz, July 3, 2023

SIGNED: ROGER EDWIN ROJAS ULO, Oscar Ferrufino Morro, Gabriel Herbas Camacho, Gumerindo Héctor Pino Guzmán.