BOARD

BOARD RESOLUTION NO. 152/2024

SUBJECT: ECONOMIC POLICY ADVISORY, FINANCIAL ENTITIES MANAGEMENT, AND MONETARY OPERATIONS MANAGEMENT – AMEND THE FOREIGN EXCHANGE POSITION REGULATION FOR FINANCIAL INTERMEDIATION ENTITIES.

VIEWING:

• The Political Constitution of the State (CPE) of February 7, 2009.
• Law No. 1670, of October 31, 1995, of the Central Bank of Bolivia (BCB).
• Board Resolution No. 108/2016 of June 14, 2016, and its modifications.
• Board Resolution No. 095/2022 of October 6, 2022, which approves the Statute of the BCB.
• Report BCB-APEC-SADBC-INF-2024-104 of November 8, 2024, issued by the Economic Policy Advisory (APEC), the Financial Entities Management (GEF), and the Monetary Operations Management (GOM).
• Report BCB-GAL-SANO-DLBCI-INF-2024-471 of November 8, 2024, issued by the Legal Affairs Management (GAL).

CONSIDERING:

That the Political Constitution of the State in its Article 327 determines that the BCB 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 states that the BCB, in coordination with the economic policy determined by the Executive Branch, in addition to those indicated by Law, has among its attributions to determine and execute monetary policy, execute exchange policy, regulate the payment system, authorize the issuance of currency, and administer International Reserves.

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That Article 1 of Law No. 1670 of the BCB, modified by Article 67, section A3, numeral 1 of Law No. 1864 of June 15, 1998, on Popular Property and Credit, determines 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 3 of the aforementioned Law establishes that the BCB will formulate policies of general application in monetary, exchange, and payment system matters for the fulfillment of its object.

That the BCB, in compliance with what is provided in Article 19 of Law No. 1670, has established a Foreign Exchange Position Regulation of mandatory compliance by the Institutions of the Financial System.

That Article 30 of Law No. 1670 states that all entities of the financial intermediation system and financial services, whose operation is authorized by the Superintendence of Banks and Financial Entities, now the Financial System Supervision Authority (ASFI), are subject to the normative competence of the BCB.

That Article 44 of Law No. 1670 provides that the highest authority of the BCB is its Board of Directors, which is responsible for defining its policies, specialized normative rules of general application, and internal rules; as well as for establishing administrative, operational, and financial strategies of the Issuer Entity, approving their respective short and medium-term programs.

That subsections a) and o) of Article 54 of Law No. 1670 indicate as attributions of the BCB Board of Directors to issue norms and adopt general decisions that are necessary for the Issuer Entity to fulfill the functions, competencies, and faculties assigned by Law; as well as 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.

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That numerals 1), 12), and 30) of Article 10 of the BCB Statute determine that the Board of Directors of the Issuer Entity has the attributions to approve general decisions and issue norms that are necessary for the BCB to fulfill the functions, competencies, and faculties assigned to it by Law; to determine the exchange regime and exchange policy; and to approve, modify, and interpret the Regulations of the BCB.

That Articles 24 and 26 of the aforementioned Statute refer that resolutions and decisions of the Board of Directors are adopted by a simple majority of votes of the members present in a meeting, except in cases where Law No. 1670 or this Statute require qualified majorities, and 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 which the subject matter of the Resolution corresponds, and by a report from the GAL. These reports must be sent to the Board of Directors by the General Management with its recommendation.

That the Foreign Exchange Position Regulation for Financial Intermediation Entities, approved by Board Resolution No. 108/2016 of June 14, 2016, and its modifications, aims to regulate the foreign exchange position of Financial Intermediation Entities in denominations other than national currency, in order to preserve the stability of the financial system, maintain the necessary control over the aggregated active and passive positions of FIEs, and promote the remonetization of the financial system.

That report BCB-APEC-SADBC-INF-2024-104, issued by APEC, GEF, and GOM, among its conclusions indicates that the proposal to modify the long position in UFV-denominated instruments would allow financial entities to have greater flexibility to acquire bonds in UFV and would incentivize deposits in this denomination, which in turn would help absorb liquidity, reducing pressures on prices; recommending to the BCB Board of Directors the approval of the modification to the Foreign Exchange Position Regulation for Financial Intermediation Entities.

That report BCB-GAL-SANO-DLBCI-INF-2024-471, the GAL concludes that the proposal to modify Article 4 of the Foreign Exchange Position Regulation for Financial Intermediation Entities, proposed by APEC, GEF, and GOM, does not

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contravene the current legal framework; 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.- Modify Article 4 (Limits of the Exchange Position) of the Foreign Exchange Position Regulation for Financial Intermediation Entities, with the following text:

"Article 4 (Limits of the Exchange Position).
Financial Intermediation Entities may maintain an exchange position according to the following rules:

a) For the sum of ME, MVDOL, and OME, the limits are as follows:

• A long position up to the equivalent of 40% (FORTY PERCENT) of the value of net equity. FIEs whose net equity value registers a negative value will automatically be in breach of the Regulation.
• A short position up to the equivalent of 50% (FIFTY PERCENT) of the value of book equity.

b) A long position in UFV-denominated instruments up to the equivalent of 20% (TWENTY PERCENT) of the value of book equity."

Article 2.- This modification of the Foreign Exchange Position Regulation for Financial Intermediation Entities will enter into force from its publication.

Article 3.- Repeal Board Resolution No. 042/2024 dated March 26, 2024.

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

La Paz, November 12, 2024

SIGNED. ROGER EDWIN ROJAS ULO, Gumercindo Héctor Pino Guzmán, Diego Alejandro Pérez Cueto Eulert, Miguel Angel Marañon Urquidi, Victor Gonzalo Calisaya Gomez.