BOARD OF DIRECTORS

BOARD RESOLUTION NO. 117/2024

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

VIEWED:

• 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 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 Statute of the BCB, approved by Board Resolution No. 095/2022 of October 6, 2022.
• The modification to the 2024 Monetary Program approved on September 4, 2024, and the Second Revision of the 2024 Fiscal-Financial Program of September 6, 2024.
• Note MEF P/VTCP/DGCP/UEPS/No. 474/2024 of September 6, 2024, from the Ministry of Economy and Public Finance (MEFP).
• Report BCB-GOM-SOSP-DCE-INF-2024-58 of September 6, 2024, from the Monetary Operations Management (GOM).
• Report BCB-APEC-SMF-INF-2024-55 of September 6, 2024, from the Economic Policy Advisory (APEC).

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Report BCB-GAL-SANO-DLBCI-INF-2024-376 of September 6, 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 is oriented toward 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, autonomous 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 powers 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 may exceptionally 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 issued by the National Treasury, which in the case provided for in subsection b) will have a maximum term of one year.

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• 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 powers assigned to it by the Law, as well as to set the interest rate of the credits granted by the BCB.
• That subsection e) of Article 59 of Law No. 1670 provides as one of the attributions of the President of the BCB to exercise the legal representation of the BCB, without prejudice to its powers of delegation according to the present Law.
• 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 has the object of regulating Articles 22 and 23 of Law No. 1670, which establish the requirements and procedures for the approval of credits to the Public Sector.
• That said Regulation, in its Article 10, establishes the requirements for the consideration of credit for temporary liquidity needs.
• That Article 11 of the aforementioned Regulation states that upon receipt of the credit request and the documentation established in Article 10, prior to the consideration of the Board of Directors, the President of the BCB will request: i) a Technical Report from the GOM specifying the outstanding debt balance as of the date of the request, future payment maturities of the TGN to the BCB, and the suitability of the public value offered to back the operation; ii) a report from the GAL regarding compliance with regulations and submission of the required documentation; iii) a report from 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 the highest authorities of the BCB and the MEFP sign annually.

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• That Article 12 of the aforementioned Regulation establishes the financial conditions, where the Board of Directors will set interest rates and the 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 Article 13 of the aforementioned Regulation provides that the BCB Board of Directors will consider the reports presented by the areas, and if appropriate, will approve the credit through 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 items 1) and 10) of Article 10 of the BCB Statute establish that the Board of Directors of the Issuing Entity has the attributions to approve general decisions and issue the norms that are necessary for the BCB to fulfill the functions, competencies, and powers 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 Articles 26 and item 13) of Article 34 of the BCB Statute determine that every draft Board of Directors 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. Likewise, among the attributions of the President of the BCB is that of signing the contracts entered into by the BCB.
• That the MEFP through Note MEF P/VTCP/DGCP/UEPS/No. 474/2024, within the framework of subsection b) of Article 22 of Law No. 1670, requests the granting of a liquidity credit with the following characteristics: i) amount and currency Bs7,000,000,000.00 (Seven Billion 00/100 Bolivianos), ii) term: 1 year, iii) principal payment: at maturity, 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 reimbursements to the BCB.

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• That report BCB-GOM-SOSP-DCE-INF-2024-58 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 year for an amount of Bs7,000,000,000.00 (Seven Billion 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 report BCB-APEC-SMF-INF-2024-55 concludes that the request made by the MEFP through note MEF P/VTCP/DGCP/UESP/No. 474/2024 dated September 6, 2024, is within the modification of the Monetary Program, the second Revision of the Fiscal-Financial Program, and the modification of the BCB liquidity credit schedule to the TGN; therefore, it recommends to the BCB Board of Directors to approve the liquidity credit requested by the MEFP.
• That report BCB-GAL-SANO-DLBCI-INF-2024-376 concludes that the credit request to the public sector to attend to temporary liquidity needs, made by the Ministry of Economy and Public Finance through Note MEF P/VTCP/DGCP/UEPS/No. 474/2024 of September 6, 2024, is legally procedent and falls within what is provided for in subsection b) of Article 22 of Law No. 1670, considering what is stated in the Reports BCB-APEC-SMF-INF-2024-55 of the APEC and BCB-GOM-SOSP-DCE-INF-2024-58 of the GOM; 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, through an 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:

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 modification to the 2024 Monetary Program and the Second Revision of the Execution Decision of the Fiscal-Financial Program

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2024, approve the granting of a Liquidity Credit in favor of the TGN – Management Year 2024, represented by the Ministry of Economy and Public Finance, under the following terms and conditions:

Concept	Detail
Amount:	Bs7,000,000,000.00 (Seven Billion 00/100 Bolivianos).
Currency:	Bolivianos.
Term (*):	1 year.
Interest Rate:	4% 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, September 9, 2024

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