Board Resolution No. 104/2020: Monetary Operations Management - Modifies Point 14 (Destination of Resources) of the Annex to Board Resolution No. 097/2020 of September 15, 2020

BOARD RESOLUTION NO. 104/2020 SUBJECT: MONETARY OPERATIONS MANAGEMENT - MODIFIES POINT 14 (DESTINATION OF RESOURCES) OF THE ANNEX TO BOARD RESOLUTION NO. 097/2020 OF SEPTEMBER 15, 2020 SEEN: The Political Constitution of the State of February 7, 2009. Law No. 1670 of October 31, 1995, of the Central Bank of Bolivia (BCB). Law No. 1834 of March 31, 1998, of the Securities Market. Law No. 1319 of August 25, 2020, Modifying Law No. 1294, of April 1, 2020, Exceptional for Deferral of Credit Payments and Temporary Reduction of Basic Services Payment. The Statute of the BCB, approved by Board Resolution No. 128/2005, of October 21, 2005 and its subsequent modifications. The Repo Operations Regulation, approved by Board Resolution No. 130/2003, of November 11, 2003. The Open Market Operations Regulation, approved by Board Resolution No. 149/2015 of August 25, 2015 and its subsequent modifications. The Open Market Operations Regulation for Monetary Regulation Purposes with Securities Issued by the Central Bank of Bolivia or by the General Treasury of the Nation, approved by Board Resolution No. 150/2015 of August 25, 2015 and its subsequent modification. The Regulation for Repo Operations, Title IV of the Compilation of Norms for the Securities Market of the Authority for Supervision of the Financial System (ASFI). Board Resolution No. 097/2020 of September 15, 2020, which approves the "Conditions and Characteristics of Exceptional Repos with the BCB". Technical Report BCB-APEC-SIE-INF-2020-40, of September 29, 2020, issued by the Economic Policy Advisory (APEC) and the Monetary Operations Management (GOM). Legal Report BCB-GAL-SANO-DLBCI-INF-2020-98, of September 29, 2020, issued by the Legal Affairs Management (GAL).

//2. B.R. NO. 104/2020 CONSIDERING: 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 monetary and exchange policy of the country, in coordination with the BCB That article 327 of the Political Constitution of the State, determines that the BCB is a public law institution, with legal personality and own patrimony, which, within the framework of the economic policy of the State, has the function of maintaining the stability of the internal purchasing power of the currency, to contribute to economic and social development. That article 328 of the Political Constitution of the State, determines that the BCB in coordination with the economic policy determined by the Executive Branch, has among others, the attribution to determine and execute monetary policy. That article 1 of Law No. 1670, establishes that the BCB is a State institution, of public law, of autarchic character, of indefinite duration, with legal personality that constitutes the sole monetary and exchange authority of the country, with administrative, technical and financial competence and specialized regulatory powers of general application. That article 2 of Law No. 1670, establishes that the object of the BCB is to procure the stability of the internal purchasing power of the national currency. That article 3 of Law No. 1670, establishes that the BCB will formulate policies of general application in monetary, exchange and payment system matters for the fulfillment of its object. That article 6 of Law No. 1670, empowers the BCB to execute monetary policy and regulate the quantity of money and the volume of credit according to its monetary program, being able to this effect, issue, place and acquire securities and perform other open market operations. That article 3 of Law No. 1834, defines as over-the-counter market the one that is carried out outside the stock exchanges, with the participation of authorized intermediaries, with securities registered in the Securities Market Register and authorized by the Superintendency of Securities, currently ASFI; and establishes that "Security" both documentary, as represented in book entries, are the Securities Titles regulated by the Commercial Code, the Securities issued by the Bolivian State and its entities, and those transaction instruments in the Securities Market, which have executive force and are freely transferable. That in the single article of Law No. 1319 authorizes the automatic deferral of the payment of credit amortizations to capital and interest, and other types of charges of the national credit system, from the Declaration of Emergency due to the Coronavirus Pandemic (COVID-19) to December 31, 2020, to all borrowers without distinction, which

//3. B.R. NO. 104/2020 in a context of lower liquidity, would aggravate the credit slowdown with adverse effects on economic activity and employment. That article 1 of the Repo Operations Regulation, establishes that said Regulation has the object of regulating the Repo Operations that the BCB carries out (OR-BCB) with authorized financial entities. That article 2 of the Repo Operations Regulation, defines that an OR-BCB consists of the sale made by an agent (the reported), at a certain price (go value) calculated on the basis of unit values, of securities issued by the BCB or the TGN, to a second agent (the reporter), with the commitment of the reported to repurchase the securities, or other equivalents, in a term and at a price (return value) preestablished on the date of the transaction. The repurchase date may not be later than the maturity date of the reported security. That articles 4, 5 and 6 of the Repo Operations Regulation establish the entities enabled to carry out OR-BCB, the modalities of the OR-BCB and the attributions that the Open Market Operations Committee (COMA) applies in the OR-BCB. That article 1 of the Open Market Operations Regulation, has the object of establishing the norms for the Open Market Operations (OMA) that the Central Bank of Bolivia carries out with financial entities, natural persons and other entities authorized by the Board of Directors of the BCB, in compliance with its functions as monetary authority. That article 4 of the Open Market Operations Regulation, establishes that the Board of Directors of the BCB defines monetary policies in general and open market operations policies (OMA) in particular. That article 14, paragraph II of the Open Market Operations Regulation, establishes that operations in the secondary market can be carried out with any security issued by the TGN, the BCB or with securities of private issuers expressly authorized by the Board of Directors of the BCB, through repo operations and others authorized. That article 1 of the Open Market Operations Regulation, for purposes of Monetary Regulation with Securities Issued by the Central Bank of Bolivia or by the General Treasury of the Nation, establishes that said Regulation, has the object of determining the conditions for the auction, allocation, redemption, administration and control of operations with securities issued by the BCB or by the General Treasury of the Nation (TGN) and placed by the BCB for monetary policy purposes. That article 6 of the Open Market Operations Regulation, for purposes of Monetary Regulation with Securities Issued by the Central Bank of Bolivia or by the General Treasury of the Nation, establishes among the attributions of the COMA, define the form

//4. B.R. NO. 104/2020 of issuance, the rates or cut-off prices, the quantities offered, the terms, the currencies, the minimum and/or maximum amounts and other characteristics of the securities for the operations authorized by the Board of Directors. That article 1 of Section II of Chapter II "Of the securities subject to repo, of the repo operations and of the obligations" of the Regulation for Repo Operations, Title IV of the Compilation of Norms for the Securities Market of the ASFI, establishes that the over-the-counter repo operations authorized for the Brokerage Agencies are those in which the BCB acts as counterparty, only in the negotiation with securities registered in the Securities Market Register and in at least one Stock Exchange. That Board Resolution No. 097/2020 of September 15, 2020, whereby the Highest Authority of the BCB approves the implementation of Exceptional Repo Operations of the BCB with the Financial System and the conditions and characteristics that appear in the "Conditions and Characteristics of Exceptional Repos with the BCB". That Technical Report BCB-APEC-SIE-INF-2020-40 of September 29, 2020, issued by the APEC and the GOM, concludes that: "Since the beginning of 2020, there has been a sharp deterioration in the global economic scenario due to the spread of COVID-19 and the measures adopted to face the pandemic. This panorama has also manifested in Bolivia with greater needs of an economic and social nature that demand measures by the authorities. The monetary policy assumed by the BCB has been decisive to maintain the liquidity and the payment chain of the economy. The BCB, with important measures, has contributed to maintaining the liquidity of the financial system at adequate levels and to containing the rise in interest rates. However, a gradual decrease in liquidity has been observed that threatens to be insufficient in a context of economic contraction, to which is added the impact that could imply the extension of the deferral of the payment of credit amortizations to capital and interest until December 31, 2020 to all borrowers without distinction. That, additionally, the aforementioned Report indicates that with the purpose of strengthening the allocation of liquidity loans to the BCB using as guarantee the CAPROSEN Fund excepting purchase of individual housing or in horizontal property, it is necessary to complement the regulation related to exceptional repos with the object of facilitating the flow of resources in the monetary and financial market towards the proposed ends, support sustaining the payment chain and help dynamize economic activity. That Legal Report BCB-GAL-SANO-DLBCI-INF-2020-98, of September 29, 2020, issued by the GAL, concludes that there is no legal impediment for the Board of Directors of the BCB within the framework of its attributions to approve the complementation requested by the APEC and the GOM to the "Conditions and Characteristics of Exceptional Repos with the BCB", according to the criteria and justifications contained in Report BCB-APEC-SIE-INF-2020-40, elaborated jointly between the APEC and the GOM.

//5. B.R. NO. 104/2020 That by virtue of the attributions conferred by subsections a), d) and q) of article 54 of Law No. 1670 and numbers 1), 4) and 51) of article 11 of the Statute of the BCB, the Board of Directors of the BCB is empowered to dictate the norms and adopt the general decisions so that the BCB fulfills the functions, competencies and powers assigned by Law, as well as dictate the norms for the open market operations that the BCB carries out. THEREFORE, THE BOARD OF DIRECTORS OF THE CENTRAL BANK OF BOLIVIA RESOLVES: Article 1.- Modify point 14 (Destination of Resources) of the Annex "Conditions and Characteristics of Exceptional Repos with the BCB" of the Board Resolution 97/2020 of September 15, 2020, in the following terms: IT READS: 14. (Destination of resources).- The entities that access these resources through the indicated repos, must allocate the same to operations exclusively in national currency. The EIFs, before entering into a repo operation under these conditions, must have disbursed to the final clients, credits for the acquisition of national products and the payment of services of national origin, except purchase of individual housing or in horizontal property, with the resources guaranteed by the CAPROSEN Fund. For this purpose, the EIFs must send a note with three business days in advance, with the character of sworn declaration, the net disbursements to the final clients of said credits. To be able to access the renewal of the repo under the initial conditions, the net disbursements to the final clients for the acquisition of national products and the payment of services of national origin, except purchase of individual housing or in horizontal property, must be at least 50% of their resources in the CAPROSEN Fund at the date of renewal. IT SHALL READ: "14. (Destination of resources).- The entities that access these resources through the indicated repos, must allocate the same to operations exclusively in national currency. The EIFs, before entering into a repo operation under these conditions, must have disbursed to the final clients credits for the acquisition of national products and the payment of services of national origin, except purchase of individual housing or in horizontal property, with the resources guaranteed by the CAPROSEN Fund. For this purpose, the EIFs must send a note with three business days in advance, with the character of sworn declaration, the net disbursements to the final clients of said credits. To be able to access the renewal of the repo under the initial conditions, the net disbursements to the final clients for the acquisition of national products and the payment of services of national origin, except purchase of individual housing or in horizontal property, must be at least 50% of their resources in the CAPROSEN Fund at the date of renewal. Additionally, starting from September 29, 2020, the EIFs that make early partial or total payments of the liquidity loans granted by the BCB with guarantee of the resources in the CAPROSEN Fund, may not access the exceptional repos." Article 2.- This Board Resolution will enter into effect the day following its publication. Article 3.- The Presidency and the General Management are in charge of the execution and compliance of this Resolution. La Paz, September 29, 2020 Signed Armando Pinell Siles Signed Walter Morales Carrasco Signed Alejandro Banegas Rivero Signed José Gabriel Espinoza Yañez