BOARD OF DIRECTORS

BOARD RESOLUTION NO. 145/2023

SUBJECT: INTERNATIONAL OPERATIONS MANAGEMENT – APPROVAL OF THE AMENDMENT TO THE REGULATION FOR THE ADMINISTRATION OF INTERNATIONAL RESERVES.

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.
• Law No. 1503, of May 5, 2023, Law on the Purchase of Gold Intended for the Strengthening of International Reserves.
• Board Resolution No. 095/2022 of October 6, 2022, which approves the Statute of the Central Bank.
• The Regulation for the Administration of International Reserves approved by Board Resolution No. 071/2023 of May 9, 2023.
• The Technical Report BCB-GOI-SRES-DNI-INF-2023-70 of October 20, 2023 from the International Operations Management (GOI).
• The Legal Report BCB-GAL-SANO-INF-2023-355 of October 23, 2023 from the Legal Affairs Management (GAL).

CONSIDERING:

That Article 327 of the Political Constitution of the State determines that the Central Bank of Bolivia (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 internal purchasing power stability of the currency, to contribute to economic and social development.

That numeral 5) of paragraph I of Article 328 of the Political Constitution of the State establishes that the BCB has the authority to administer International Reserves.

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That Article 1 of Law No. 1670 establishes that the BCB is an institution of the State, of public law, of an autarkic nature, of indefinite duration, with legal personality and its own 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 normative faculties of general application.

That Article 14 of Law No. 1670 establishes that the BCB will ensure the strengthening of International Reserves so as to allow the normal functioning of Bolivia's international payments.

That Article 15 of Law No. 1670 provides that the BCB's International Reserves are constituted by one or more of the following assets in accordance with international order norms: a) Physical gold; b) Currencies deposited in the BCB itself or in financial institutions outside the country at the order of the BCB, which must be of first rank according to accepted international criteria; c) Any internationally recognized reserve asset; d) Bills of exchange and promissory notes in favor of the BCB, denominated in foreign currencies of general acceptance in international transactions and payable abroad; e) Public bonds and other negotiable instruments issued by foreign governments, entities, and international organizations or first-rank foreign financial institutions duly qualified as eligible by the BCB Board of Directors; and f) Own contributions to international financial organizations when such contributions are internationally regarded as reserve assets.

That Article 16 of Law No. 1670 provides that the BCB will administer and manage its International Reserves, being able to invest them and deposit them in custody, as well as dispose of and pledge them, in the manner it considers most appropriate for the fulfillment of its object and functions and for their adequate safeguard and security. It may also purchase foreign exchange hedging instruments with the objective of reducing risks. In the case of the pledge of gold, it must have legislative approval.

That Article 17 of Law No. 1670 states that International Reserves are unseizable and cannot be subject to precautionary, administrative, or judicial measures. Nor can they be subject to any state tax or contribution, except for quotas to the Superintendence of Banks and Financial Entities according to this Law.

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 norms of

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general application and internal norms.

That sub-items a), c), and o) of Article 54 of Law No. 1670 indicate the following as attributions of the Board of Directors: Issue norms and adopt general decisions that are necessary for the BCB to fulfill the functions, competencies, and faculties assigned to it by the Law, carry out follow-up on the execution of monetary, exchange, credit, financial intermediation, and International Reserves administration policies and regulations, and 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 the Final Disposition of Law No. 1503 states 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 authorized to apply what is provided in Law No. 1670 of October 31, 1995, of the Central Bank of Bolivia and its modifications, this being sufficient for the development of its functions, without requiring further provisions from said law.

That numeral 1) of Article 10 of the BCB Statute provides that the Board of Directors has the faculty to approve general decisions and issue norms that are necessary for the BCB to fulfill the functions, competencies, and faculties assigned to it by the Law.

That in virtue of the attributions conferred by numeral 6) of Article 10 of the BCB Statute, the BCB Board of Directors is authorized to approve the policy and norms for the administration of International Reserves as well as to carry out follow-up on their execution.

That numeral 30) of the cited Article 10 of the BCB Statute states that the Board of Directors may 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 Article 26 of the Statute stipulates that the Board of Directors pronounces itself on matters within its competence through resolutions. It may also do so through decisions that will be expressly recorded in the minutes. Likewise, every draft Board resolution must be motivated and justified by a technical report from the Management or Managements to whom the matter subject to the resolution corresponds and by a report from the Legal Affairs

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Management. These reports must be sent to the Board of Directors by the General Management with its recommendation.

That the Regulation for the Administration of International Reserves approved by Board Resolution No. 071/2023 of May 9, 2023 has the object of establishing the guidelines and general norms for the administration, evaluation, and control of the BCB's International Reserves.

That the Technical Report BCB-GOI-SRES-DNI-INF-2023-70 of October 20, 2023 from the GOI concludes that, with the objective of increasing the liquidity position of International Reserves, it is necessary to include the repo operation, since it is not contemplated in the current Regulation for the Administration of International Reserves. Likewise, it recommends submitting to the Board of Directors the approval of the amendment to the Regulation for the Administration of International Reserves, prior to the legal opinion of the Legal Affairs Management.

That the Report BCB-GAL-SANO-DLBCI-INF-2023-355 of October 23, 2023 concludes that in accordance with Report BCB-GOI-SRES-DNI-INF-2023-70, the modification of Paragraph I of Article 18 of the Regulation for the Administration of International Reserves does not contravene any regulatory provision; therefore, it is legally appropriate, recommending to the BCB Board of Directors its approval.

THEREFORE,

THE BOARD OF DIRECTORS OF THE CENTRAL BANK OF BOLIVIA

RESOLVES:

Article 1. Approve the modification of paragraph I of Article 18 (Operations and Investment Instruments) of the Regulation for the Administration of International Reserves approved by Board Resolution No. 071/2023 of May 9, 2023, with the following text:

"Article 18.- (Operations and investment instruments) I. The authorized investment operations are:

• Establishment of time deposits;
• Securities Lending;
• Purchase-sale of assets, bonds, and securities;"

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• Purchase of gold;
• Conversion of gold into currencies;
• Purchase-sale of currencies;
• Risk hedging with derivatives;
• Asset swap;
• Currency swap;
• Repo of bonds and securities.

Article 2.- This Resolution shall enter into force from its publication.

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

La Paz, October 24, 2023

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