2023-12-12 | RESOLUCIONES DE DIRECTORIO N° 158/2023Added · Updated
The Board of Directors of the Central Bank of Bolivia amends Article 23 of the Regulation for the Administration of International Reserves to establish specific sovereign and issuer credit rating thresholds for monetary reserves, gold investments, and repo operations. The resolution mandates minimum long-term ratings of A or higher for general monetary investments, AA- or higher for gold, and A- or higher for repo operations where the central bank is the lender, while capping annual credit risk at 1% of USD-denominated reserves. These requirements apply to all international reserve investments and intermediation activities managed by the central bank.
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specialized normative powers of general application.
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“Article 23.- (Credit Risk)
I. The country where the investments are made and the country of the headquarters of the institutions in which the investments of International Monetary Reserves are made or with which the intermediation is carried out, must have a long-term sovereign credit risk rating equal to or greater than A (S&P), A (Fitch), or A2 (Moody’s).
II. For gold investments, the country where the investments are made and the country of the headquarters of the institutions in which the investments are made must have a long-term sovereign credit risk rating equal to or greater than AA- (S&P), AA- (Fitch), or Aa3 (Moody’s).
III. The long-term issuer credit risk rating where International Reserve investments are made must be equal to or greater than A (S&P), A (Fitch), or A2 (Moody’s) and short-term equal to or greater than A-1 (S&P), F1 (Fitch), or P-1 (Moody’s).
IV. The long-term issuer credit risk rating with which repo operations of International Reserves are carried out, when the BCB acts as the lender, must be equal to or greater than A- (S&P), A- (Fitch), or A3 (Moody’s) and short-term equal to or greater than A-1 (S&P), F1 (Fitch), or P-1 (Moody’s).
V. Investments are made in non-subordinated debt securities.
VI. Investments are made in securities with no component associated with the equity market.
VII. Investments of International Reserves may be made in international organizations: Bank for International Settlements (BIS), World Bank (WB), Latin American Bank of Foreign Trade (BLADEX), and Latin American Reserve Fund (FLAR).
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VIII. For gold investments, financial entities must be members of the London Bullion Market Association.
IX. The maximum credit loss in a year, measured by Credit Value at Risk (Credit VaR), is 1% for International Monetary Reserves denominated in United States dollars, with a confidence level of 99.9%. In case of non-compliance, the Investment Control Department will report this to the CRI, the body that will submit corrective actions to be followed to the Board of Directors for approval.”
La Paz, December 4, 2023
SIGNED. ROGER EDWIN ROJAS ULO, Oscar Ferrufino Morro, Gabriel Herbas Camacho, Gumercindo Héctor Pino Guzmán, Diego Alejandro Pérez Cueto Eulert.
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