BOARD OF DIRECTORS

BOARD RESOLUTION NO. 151/2024

SUBJECT: INTERNATIONAL OPERATIONS MANAGEMENT – REVOKE BOARD RESOLUTION NO. 148/2024 OF NOVEMBER 5, 2024.

VIEWING:

• 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 for the Strengthening of International Reserves.
• The BCB Statute approved by Board Resolution No. 095/2022 of October 6, 2022.
• The Regulation of the International Reserves Committee, approved by Board Resolution No. 017/2023 of January 25, 2023.
• The Regulation for the Administration of International Reserves, approved by Board Resolution No. 071/2023 of May 9, 2023, and its modifications.
• Report BCB-GOI-SRES-DNI-INF-2024-77 of November 8, 2024 issued by the International Operations Management (GOI).
• Report BCB-GAL-SANO-DLBCI-INF-2024-470 of November 8, 2024 issued by the Legal Affairs Management (GAL).

CONSIDERING:

That Article 327 of the CPE 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.

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That item 5) of paragraph I of Article 328 of the CPE establishes that the BCB has the authority to administer International Reserves.

That Article 1 of Law No. 1670 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 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 the aforementioned 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 and e) Public securities 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.

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

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 general application, and internal norms.

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

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That Paragraph II of Article 9 of Law No. 1503 establishes that the BCB must maintain a minimum of twenty-two (22) tons of gold reserves from the International Reserves, computable semi-annually from the approval of said Law.

That the Sole Final Provision of Law No. 1503 states that within the framework of Articles 327 and 328 of the CPE, 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 BCB and its modifications, being this sufficient for the development of its functions, without requiring further provisions from said Law.

Plurinational Constitutional Sentence 1602/2014, in its ratio decidendi expressed in paragraph III.2 referring to the presumption of legality of administrative action and the principle of good faith expressed the following, "Regarding this, SC 0095/2001 of December 21, stated the following: '... a Democratic State is organized and governed by fundamental principles, among them, the principle of legal certainty, the principle of good faith, and the presumption of legitimacy of the administrative act. Security implies 'exemption from danger or harm, solidity, full certainty, firm conviction', and legal certainty, as taught by doctrine, is an 'essential condition for the life and development of nations and the individuals who make them up. It represents the guarantee of the objective application of the Law, such that individuals know at all times what their rights and obligations are, so that the whim, clumsiness, or bad will of rulers cannot cause them harm' concept that has been assumed by this Tribunal in its jurisprudence. Consequently, it is the duty of the State to provide legal certainty to citizens, ensuring all persons the effective exercise of their fundamental rights and constitutional guarantees proclaimed by the Constitution...'. The principle of good faith is the trust expressed in the acts and decisions of the State and the public servant, as well as in the actions of the private party in relations with public authorities. In such a way that, applied to relations between public authorities and private parties, this principle requires that public activity be carried out in a climate of mutual trust that allows them to maintain a reasonable certainty regarding what they do, based on elements of judgment obtained from decisions and precedents emanating from the own

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administration, likewise certainty regarding decisions or resolutions obtained from public authorities. ...within the referred legal framework, it is presumed that the State's administrative acts are legal and legitimate; it should be remembered that the presumption of legitimacy of the administrative act is based on the reasonable assumption that the act responds to and adjusts to the norms provided in the legal order in effect at the time the act was assumed or the resolution was issued, that is, it has all the necessary elements to produce legal effects, so the administrative act is legitimate with respect to the Law and valid with respect to the consequences it may produce...(...)".

That in accordance with items 1) and 3) of Article 5 of the BCB Statute, the Issuing Entity has normative, administrative, technical, and financial competence, among these, to issue specialized norms in the fields assigned to it by the Law and technical competence for the formulation of policies and the application of instruments that allow it to fulfill its object.

That Article 6 and items 1), 6), and 30) of Article 10 of the BCB Statute provide 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; as well as to approve the policy and norms for the administration of International Reserves and carry out follow-up on their execution, and to 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 the aforementioned Statute 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 this Statute require qualified majorities.

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 subject matter of the resolution corresponds and by a report from the Legal Affairs Management. These reports must be sent to the Board of Directors by the General Management with its recommendation.

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That Articles 8, 9, and 18 of the Regulation for the Administration of International Reserves establish that International Reserves have the objective of maintaining the normal functioning of the country's international payments and backing monetary and exchange policies, determining their structure composed of International Monetary Reserves, Gold Reserves, and SDR Holdings. Likewise, it enumerates investment operations and instruments, establishing the Global Credit Risk Policy.

That report BCB-GOI-SRES-DNI-INF-2024-77 from the GOI concludes that, since the publication of Board Resolution No. 148/2024 modifying the Regulation for the Administration of International Reserves, interpretations and tendentious and decontextualized versions of the regulations and the BCB's conduct have been generated, therefore, in order to avoid misinformation and distortion that could generate uncertainty in the population, since the aspects referred to in Board Resolution No. 148/2024 are established in the Political Constitution of the State as well as in Laws No. 1670 and No. 1503 which are fully in force and applicable, within the framework of its competencies, the BCB will strengthen the liquidity position of the International Reserves, a mandate that regardless of the precision made in Board Resolution No. 148/2024, was fulfilled, with the BCB continuing its mandate in accordance with current regulations; recommending to put before the Board of Directors the revocation of Board Resolution No. 148/2024, as it is technically viable.

That report BCB-GAL-SANO-DLBCI-INF-2024-470 concludes that, Board Resolution No. 148/2024 modifying the Regulation for the Administration of International Reserves was issued, among other things, with the purpose of specifying the calculation dates (May 5 and November 5) provided for in paragraph II, of Article 9 of Law No. 1503, which establishes that, "(...) the BCB must maintain a minimum of 22 tons of gold reserves from the international reserves, computable from the approval of said Law" (May 5, 2023) as well as to strengthen the liquidity position of the international reserves, regulations that have been issued by the Issuing Entity within the framework of its constitutional and legal functions, among them Law No. 1503, approved by the Plurinational Legislative Assembly, and which at the date are fully in force and applicable; however, since the publication of said Board Resolution No. 148/2024, interpretations and tendentious and decontextualized versions of the current legal framework as well as of the BCB's conduct without any technical, legal, or documentary backing have been generated, the proposal of the GOI expressed in BCB-GOI-SRES-DNI-INF-2024-77, to revoke Board Resolution No. 148/2024, in order to generate certainty in the population and avoid distorted versions and misinformation, is legally viable, within the framework of the principles of presumption of legality, good faith, and legal certainty; recommending to the Board of Directors to revoke said Board Resolution.

THEREFORE,

THE BOARD OF DIRECTORS OF THE CENTRAL BANK OF BOLIVIA

RESOLVES:

Article 1.- Revoke Board Resolution No. 148/2024 of November 5, 2024.

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

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

La Paz, November 8, 2024

SIGNED. ROGER EDWIN ROJAS ULO, Gumerindo Héctor Pino Guzmán, Miguel Angel Marañon Urquidi, Victor Gonzalo Calisaya Gomez