BOARD OF DIRECTORS

BOARD RESOLUTION NO. 024/2024

SUBJECT: MONETARY OPERATIONS MANAGEMENT – MODIFICATION OF THE OPEN MARKET OPERATIONS REGULATION.

VIEWED:

• 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.
• The Statute of the Central Bank of Bolivia, approved by Board Resolution No. 095/2022 of October 6, 2022.
• The Open Market Operations Regulation approved by Board Resolution No. 108/2023 of August 2, 2023.
• Report BCB-GOM-SOMA-INF-2024-28 of February 22, 2024, issued by the Monetary Operations Management (GOM).
• Report BCB-GAL-SANO-DLBCI-INF-2024-45 of February 22, 2024, issued by the Legal Affairs Management (GAL).

CONSIDERING:

• That the Political Constitution of the State in its Articles 327 and 328 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 and among its attributes is to determine and execute monetary policy.
• That Law No. 1670 in its Article 1 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, in the manner and, with the scope established in said Law.

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• That Law No. 1670 in its Articles 3 and 6 provides that the BCB formulates policies of general application in monetary matters for the fulfillment of its objective, for which through Article 6 the BCB is authorized to execute monetary policy and regulate the quantity of money and the volume of credit according to its monetary program, being able to this effect, issue, place and acquire securities and carry out other open market operations, such as all those repo operations.
• 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 said Law, in letters a), d) and o) of Article 54 establishes that it is the attributions of the BCB Board of Directors to issue norms and adopt the general decisions that were necessary for the BCB to fulfill the functions, competencies and faculties assigned to it by the Law, to issue the norms for the open market operations carried out by the BCB; 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 any additional administrative act.
• That items 1) and 3) of Article 5 of the BCB Statute provide that its Board of Directors has normative competence to issue specialized norms in the fields assigned by Law and technical competence for the formulation of policies and the application of instruments that allow it to fulfill its object.
• That items 1), 5) and 30) of Article 10 of the BCB Statute determine as attributions of the Board of Directors, to approve the general decisions and issue the norms that were necessary for the BCB to fulfill the functions, competencies and faculties assigned to it by the Law; to approve the policy and norms for Open Market Operations, as well as to execute their follow-up on their execution; in addition to approving, modifying and interpreting 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 provides that the 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.

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• That paragraphs I and II of Article 26 of the BCB Statute stipulate that the Board of Directors pronounces itself on matters within its competence through Resolutions. It can also do so through decisions that will be expressly recorded in the Minutes. Likewise, any 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 Article 1 aims to regulate the Open Market Operations carried out by the Central Bank of Bolivia with the purpose of expanding or contracting liquidity and regulating the volume of credits, to safeguard the stability of the internal purchasing power of the currency and contribute to economic and social development.
• That letter d) of Article 4, of the Open Market Operations Regulation, defines Open Market Operations as purchase and sale operations of securities, repos and others carried out in the Primary and/or Secondary Market.
• That paragraph II of Article 7 of the Open Market Operations Regulation establishes that the GOM will formulate recommendations on the characteristics of the securities to be issued and will carry out evaluations in order to measure the impact of OMOs.
• That the Report BCB-GOM-SOMA-INF-2024-28 of the GOM concludes that it is necessary to modify the title of Chapter VII and Articles 2, 8, 36, 37, 39, 41, 42 and 44 of the Open Market Operations Regulation in order to operationalize the "Economic, Productive and Business Agreement between the National Government and the Bolivian Business Community", recommending its approval.
• That in Report BCB-GAL-SANO-DLBCI-INF-2024-45 it concludes that considering the Report of the GOM, the modifications to the Open Market Operations Regulation approved by Board Resolution No. 108/2023 aim to operationalize and comply with item 3 of the "Economic, Productive and Business Agreement between the National Government and the Bolivian Business Community" since the scope of the direct sale of bonds to legal entities is expanded, which is why it is legally viable, recommending to the Board of Directors of the BCB its approval.

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THEREFORE,

THE BOARD OF DIRECTORS OF THE CENTRAL BANK OF BOLIVIA

RESOLVES:

Article 1.- Modify Article 2 of the Open Market Operations Regulation approved by Board Resolution No. 108/2023 of August 2, 2023, with the following text:

"Article 2.- (Scope of Application) The regulation will apply to Open Market Operations carried out by the Central Bank of Bolivia with financial intermediation entities, brokerage agencies, investment funds, investment fund management companies, insurance companies, pension fund administrators, public or private companies and natural or legal persons."

Article 2.- Modify letter d) of paragraph I of Article 8 of the Open Market Operations Regulation approved by Board Resolution No. 108/2023 of August 2, 2023, with the following text:

" ... d. Direct sale of securities. ..."

Article 3.- Modify the Title of Chapter VII, of the Open Market Operations Regulation approved by Board Resolution No. 108/2023 of August 2, 2023, with the following text:

"CHAPTER VII DIRECT SALE OF SECURITIES"

Article 4.- Modify Article 36 of the Open Market Operations Regulation approved by Board Resolution No. 108/2023 of August 2, 2023, with the following text:

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"Article 36. (Object). The BCB may carry out the direct sale of securities through the BCB's customer service platform channels, brokerage agencies and internet sales, with the aim of assisting in the regulation of the liquidity of the financial system and deepening access to savings."

Article 5.- Modify paragraph I of Article 37 of the Open Market Operations Regulation approved by Board Resolution No. 108/2023 of August 2, 2023, with the following text:

"Article 37. (Conditions). I. The Board of Directors will approve the general guidelines regarding yield rate, term, currency of issuance and the placement period of the direct sale securities."

Article 6.- Modify Article 39 of the Open Market Operations Regulation approved by Board Resolution No. 108/2023 of August 2, 2023, with the following text:

"Article 39. (Registration of the issuance). The bonds placed through direct sale operations will be represented by book entries and must be registered with the SDV according to the characteristics and conditions of issuance of BCB securities."

Article 7.- Modify Article 41 of the Open Market Operations Regulation approved by Board Resolution No. 108/2023 of August 2, 2023, with the following text:

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"Article 41. (Prohibition). BCB public servants may not acquire the bonds placed through direct sale operations, nor maintain them if their acquisition was prior to the incorporation of the official into the BCB."

Article 8.- Modify Article 42 of the Open Market Operations Regulation approved by Board Resolution No. 108/2023 of August 2, 2023, with the following text:

"Article 42. (Sale through BCB customer service platform). Natural and legal persons may acquire direct sale bonds through the BCB's customer service platform and confirm their intention to purchase by means of cash deposit, payment with debit or credit card, national or foreign bank transfers, QR transfers and others as determined by the COMA."

Article 9.- Modify Article 44 of the Open Market Operations Regulation approved by Board Resolution No. 108/2023 of August 2, 2023, with the following text:

"Article 44. (Sale through electronic means). I. The direct sale of securities will be carried out through the electronic means enabled by the BCB according to the determinations of the COMA. II. Access to this channel by virtue of its purpose is restricted only to those who acquire bonds in their own name and can transfer resources in favor of the BCB through national or foreign bank transfers."

Article 10.- This Resolution will enter into effect from its approval.

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Article 11.- The Presidency and the General Management are charged with the compliance of this Resolution.

La Paz, February 23, 2024

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