Central Bank of Bolivia

Board of Directors

BOARD RESOLUTION NO. 102/2021

SUBJECT: TREASURY MANAGEMENT – REGULATION ON THE EXCHANGE AND FRAGMENTATION OF MONETARY MATERIAL OF THE CENTRAL BANK OF BOLIVIA

VIEWED:

The Political Constitution of the State.

Law No. 1670 of the Central Bank of Bolivia (BCB), dated October 31, 1995.

The Statute of the BCB approved by Board Resolution No. 128/2005, dated October 21, 2005, and its subsequent modifications.

The Regulation on the Exchange and Fragmentation of Monetary Material of the Central Bank of Bolivia, approved by Board Resolution No. 110/2018 of August 21, 2018.

Report BCB-GTES-SAMM-DAMM-INF-2021-71 of August 27, 2021, from the Treasury Management.

Report BCB-GAL-SANO-INF-2021-177 of September 2, 2021, from the Legal Affairs Management.

CONSIDERING:

That the Political Constitution of the State establishes in its article 328 that the attributions of the BCB, in coordination with the economic policy determined by the Executive Branch, in addition to those indicated by Law, include: determining and executing monetary policy, executing exchange rate policy, regulating the payment system, authorizing the issuance of currency, and administering international reserves.

That pursuant to articles 1 and 3 of Law No. 1670, the BCB is the sole monetary and exchange authority of the country with administrative, technical, and financial competence and specialized normative powers of general application, being empowered to formulate policies in monetary, exchange, and payment system matters.

That article 13 of Law No. 1670 provides that the BCB, banks, and all financial intermediation institutions are obligated to exchange deteriorated or mutilated banknotes, provided that these clearly retain their two signatures and a serial number.

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That pursuant to article 30 of Law No. 1670, all Financial Intermediation Entities (EIF) and financial services, whose operation is authorized by the Superintendence of Banks and Financial Entities, currently the Financial System Supervisory Authority, ASFI, are subject to the normative competence of the BCB, with respect to their relationship as the monetary, exchange, and payment system authority.

That the Treasury Management, through Report BCB-GTES-SAMM-DAMM-INF-2021-71 of August 27, 2021, recommends approving the new Regulation on the Exchange and Fragmentation of Monetary Material of the BCB, after legal analysis, and rendering ineffective B.R. No. 110/2018 of August 21, 2018.

That the Legal Affairs Management, through Report BCB-GAL-SANO-DLBCI-INF-2021-177, concludes that the proposal for the approval of a new Regulation on the Exchange and Fragmentation of Monetary Material of the BCB, made by GTES, is legally appropriate, and that it is the competence of the Board of Directors of the Issuing Entity to consider its approval, by two-thirds of the votes of all its members, in accordance with what is established in subsection o) of article 54 of Law No. 1670 and numeral 29 of article 11 of the Statute of the BCB.

THEREFORE,

THE BOARD OF DIRECTORS OF THE CENTRAL BANK OF BOLIVIA

RESOLVES:

Article 1.- Approve the New Regulation on the Exchange and Fragmentation of Monetary Material of the BCB, in its three chapters and nine articles, which form part of this Resolution in the Annex.

Article 2.- The new Regulation on the Exchange and Fragmentation of Monetary Material of the BCB will enter into force from the approval of this Resolution.

Article 3.- Render ineffective as of the date of this Resolution the Regulation on the Exchange and Fragmentation of Monetary Material of the BCB, approved by Board Resolution No. 110/2018 of August 21, 2018.

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Article 4.- The Presidency and General Management are charged with the execution and compliance of this Resolution.

La Paz, September 16, 2021

Roger Edwin Rojas Ulo Samuel Rafael Boyán Tellez Bismarck Javier Arevilca Vásquez Gabriel Herbas Camacho Gumerindo Héctor Pino Guzmán

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ANNEX

REGULATION ON THE EXCHANGE AND FRAGMENTATION OF MONETARY MATERIAL OF THE BCB

CHAPTER I

OBJECT AND SCOPE OF APPLICATION

Article 1. (Object).

This Regulation aims to govern the operations of exchange of Boliviano banknotes and the fragmentation of Boliviano banknotes and/or coins that must be carried out by all Financial Intermediation Entities supervised by the Financial System Supervisory Authority.

Article 2. (Abbreviations).

• ASFI: Financial System Supervisory Authority
• BCB: Central Bank of Bolivia
• EIF: Financial Intermediation Entity
• MM: Monetary Material
• OMA: Open Market Operations

Article 3. (Scope of Application).

This Regulation applies to all EIF supervised by the ASFI, established throughout the national territory.

CHAPTER II

EXCHANGE AND FRAGMENTATION OF MM

Article 4. (Exchange).

The BCB and the EIF are obligated to exchange deteriorated or mutilated Boliviano banknotes, in accordance with the “Manual for the Selection of Boliviano Banknotes”, provided that these clearly retain their two signatures and a serial number, regardless of whether the banknotes are torn in the part of the signatures or serial numbers, as long as these elements are complete and form part of the same banknote.

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Article 5. (Fragmentation).

The BCB and the EIF in all their branches and agencies within the national territory are obligated to fragment Boliviano banknotes and coins into others of lower value.

Article 6. (Categories and fragmentation limits).

The following categories and limits for the fragmentation of MM are established:

No.	Categories	Fragmentation Limits
1.	General public, transport, businesses, and small businesses	The public will be provided with fragmented banknotes and coins in the denominations required, provided that the total fragmented amount does not exceed Bs5,000.
2.	Medium and large operators in the public or private sector (commercial chains, supermarkets, fuel supplier associations, pharmacy chains, toll service companies, and others)	Through the BCB: By written request addressed to the Sub-Management of Monetary Material Operations or to the email address fraccionamiento@bcb.gob.bo, including the disaggregation of required denominations between banknotes and coins, provided that the total fragmented amount is less than Bs70,000.<br><br>Through the EIF: In coordination with them, with no limits on the fragmentation of MM.

Article 7. (Dissemination).

The BCB will provide EIF with dissemination materials informing about the obligation to exchange and fragment the national currency, which must be displayed in visible places in all their branches and agencies.

CHAPTER III

SUPERVISION AND PENALTIES

Article 8. (Supervision by ASFI).

ASFI will incorporate in its Operational Risk Inspections the supervision of the adequate provision of national currency exchange and fragmentation services by the EIF and will inform the BCB of identified non-compliances, detailing: the infringing EIF, place, date, and time of the event.

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Article 9. (Application of suspensions for non-compliance).

Once the communication from ASFI regarding the non-compliance with this Regulation is received, the BCB will proceed to suspend the infringing EIF according to the following details:

1. For the first non-compliance in the year, a suspension of 15 calendar days to buy and sell USD to the BCB.
2. For the second non-compliance in the year, a suspension of 30 calendar days to buy and sell USD to the BCB and to conduct OMA with the BCB.
3. From the third non-compliance in the year, a suspension of 60 calendar days to buy and sell USD to the BCB and to conduct OMA with the BCB.