Central Bank of Bolivia

Board of Directors

BOARD RESOLUTION NO. 214/2016

SUBJECT: ECONOMIC POLICY ADVISORY AND FINANCIAL ENTITIES MANAGEMENT APPROVE MODIFICATION TO THE LEGAL RESERVE REGULATION.

VISTOS (VIEWED):

• The Political Constitution of the State promulgated on February 7, 2009.
• Law No. 1670 of October 31, 1995 of the Central Bank of Bolivia (BCB).
• The BCB Statute approved via Board Resolution No. 128/2005 of October 21, 2005 and its subsequent modifications.
• The Legal Reserve Regulation approved via Board Resolution No. 107/2016 of June 14, 2016.
• The Report from the Economic Policy Advisory and Financial Entities Management BCB-APEC-SIE-INF-2016-119 of November 10, 2016.
• The Report from the Legal Affairs Management BCB-GAL-SAO-DLBCI-INF-2016-314 of November 11, 2016.

CONSIDERANDO (CONSIDERING):

• That the Political Constitution of the State in its article 328 provides that the BCB is empowered, in coordination with the economic policy determined by the Executive Branch, to determine and execute monetary policy and execute exchange rate policy.
• That the BCB, in compliance with what is provided in article 19 of Law No. 1670, has established a Legal Reserve Regulation of mandatory compliance by Institutions of the Financial System.
• That the BCB Statute in article 11 numeral 7), states that it is the faculty of the Board to establish, by absolute majority of votes, legal reserves of mandatory compliance by Financial Intermediation Entities and approve their composition, amount, calculation, characteristics, forms of administration, custody, and remuneration according to Regulation.
• That the Legal Reserve Regulation aims to establish the technical and operational conditions of mandatory compliance for financial entities that are duly authorized for their operation by the Supervisory Authority of the Financial System, regarding the constitution and form of administration of the legal reserve.
• That the Economic Policy Advisory and the Financial Entities Management through

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Report BCB-APEC-SIE-INF-2016-119 recommend the approval of the modification of article 6 of the Legal Reserve Regulation.

That according to Report BCB-GAL-SANO-DLBCI-INF-2016-314 the Legal Affairs Management concludes that the proposed modification indicated is legally appropriate, insofar as it does not contravene the current legal framework, being the competence of the BCB Board to consider its approval by two-thirds of the votes of all its members, in accordance with what is provided by subsection o) of article 54 of Law No. 1670 concordant with numeral 29) of article 11 of the BCB Statute.

THEREFORE,

THE BOARD OF DIRECTORS OF THE CENTRAL BANK OF BOLIVIA RESOLVES:

Article 1.- Modify article 6 of the Legal Reserve Regulation according to the following:

IT SAYS:

Article 6 (Deductions and exemptions from reserve).

Short-term liabilities with the exterior, contracted exclusively for foreign trade operations with exact matching between asset and liability for each operation, will be exempt from the requirement to constitute legal reserve.

IT MUST SAY:

“Article 6 (Deductions and exemptions from reserve).

Short-term liabilities with the exterior, contracted exclusively for foreign trade operations with exact matching between asset and liability for each operation, will be exempt from the requirement to constitute legal reserve.

The following accounts of the IFD (Financial Intermediation Entities) are exempt from the application of cash reserve (in all currencies) and additional reserve in securities (in ME and MVDOL):

• 237.01 Financing from entities of the exterior for short-term free availability
• 237.02 Financing from entities of the exterior for short-term foreign trade operations (for the part that does not maintain exact matching with active operations)
• 237.08 Head office and branches for short-term free availability

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• 237.09 Head office and branches for short-term foreign trade operations (for the part that does not maintain exact matching with active operations)”

Article 2.- This partial modification of the Legal Reserve Regulation will enter into force starting from November 21, 2016.

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

La Paz, November 15, 2016

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Signatures:

• Marcelo Zabalaga Estrada
• Sergio Velarde Vera
• Ronald Polo Rivero
• Abraham Pérez Alandia
• Luis Baudoin Olea