BOARD OF DIRECTORS

BOARD RESOLUTION NO. 036/2022

SUBJECT: TREASURY MANAGEMENT – MODIFICATION OF THE CURRENCY MATERIAL ADMINISTRATION REGULATION

VIEWING:

• The Political Constitution of the State of February 7, 2009.
• Law No. 1670, of the Central Bank of Bolivia (BCB), of October 31, 1995, and its modifications.
• The Statute of the Central Bank of Bolivia approved by Board Resolution No. 128/2005 of October 21, 2005, and its modifications.
• Board Resolution No. 106/2021 of September 30, 2021, which approves the Currency Material Administration Regulation.
• Report BCB-GTES-SAMM-DAMM-INF-2022-31 of April 21, 2022, issued by the Treasury Management (GTES).
• Report BCB-GAL-SANO-INF-2022-74 of April 22, 2022, issued by the Legal Affairs Management (GAL).

CONSIDERING:

• That Article 327 of the Political Constitution of the State establishes that the BCB is a public law institution, with legal personality and its own assets, within the framework of the State's economic policy, it has the function of maintaining the stability of the internal purchasing power of the currency, to contribute to economic and social development.
• 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, states 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 regulatory powers of general application.
• That Article 10 of Law No. 1670 establishes that the BCB will exercise exclusively and inalienably the function of issuing the monetary unit of Bolivia, which is the "Boliviano," in the form of banknotes and metallic coins.
• That Article 11 of Law No. 1670 provides that the banknotes and coins issued by the BCB are legal tender throughout the territory of the Plurinational State of Bolivia, with unlimited liberating power. They will have the denominations, dimensions, designs, and colors that its Board of Directors shall determine, which must make their characteristics public. The banknotes

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must bear the signatures of the President and the General Manager of the BCB and the serial number on both halves of them.

• That Article 13 of Law No. 1670 states that the BCB, banks, and all financial intermediation institutions are obliged to exchange damaged or mutilated banknotes, provided that they clearly retain their two signatures and a serial number.
• That Article 30 of Law No. 1670 establishes that all entities of the financial intermediation and financial services system, whose operation is authorized by the Superintendence of Banks and Financial Entities, currently the Financial System Supervision Authority – ASFI, are subject to the regulatory competence of the BCB.
• That subsections a), m), and o) of Article 54 of Law No. 1670 establish as attributions of the Board of Directors to issue the norms and adopt the general decisions that are necessary for the BCB to fulfill the functions, competencies, and powers assigned to it by the Law; as well as, to authorize and supervise the printing, issuance, and destruction of banknotes and the minting and withdrawal of coins, within the norms of the Law; 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 any additional administrative act.
• That numerales 11) and 29) of Article 11 of the BCB Statute approved by Board Resolution No. 128/2005 of October 21, 2005, and its modifications, regarding the Attributions of the Board of Directors, states among others, the: "Approve the printing, issuance, and destruction of Boliviano banknotes and coins, and those issued for commemorative and numismatic purposes as well as their denominations, dimensions, designs, and colors, according to Regulations when applicable." As well as, the: "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 Board Resolution No. 106/2021 of September 30, 2021, approves the Currency Material Administration Regulation.
• That Report BCB-GTES-SAMM-DAMM-INF-2022-31 of April 21, 2022, from the GTES, concludes that in order to ensure that Bs10 and Bs20 banknotes stored in the vaults of Banking Entities meet their useful life, from their recirculation by the BCB, the need arises to modify Paragraph III, of Article 4 of the Currency Material Administration Regulation, which was approved by Board Resolution No. 106/2021, including that Financial Intermediation Entities may deposit usable Bs10 and Bs20 banknotes as legal reserve, prior written authorization of the GTES, therefore recommending to the BCB Board of Directors the approval of the modification.

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That Report BCB-GAL-SANO-DLBCI-INF-2022-74 of April 22, 2022, from the GAL concludes that the modification of Paragraph III of Article 4 of the Currency Material Administration Regulation, proposed by the GTES, does not contravene the current legal framework; therefore, it recommends to the BCB Board of Directors its approval.

THEREFORE,

THE BOARD OF DIRECTORS OF THE CENTRAL BANK OF BOLIVIA

RESOLVES:

Article 1.- Modify Paragraph III of Article 4 of the Currency Material Administration Regulation approved by Board Resolution No. 106/2021 of September 30, 2021, as follows:

"III. Deposits of usable Bs10 and Bs20 banknotes may be made, prior written authorization of the GTES."

Article 2.- The Presidency and the General Management are charged with the execution and compliance of this Board Resolution.

La Paz, May 03, 2022

SIGNED. OSCAR FERRUFINO MORRO, Gabriel Herbas Camacho, Gumercindo Héctor Pino Guzmán, Diego Alejandro Pérez Cueto Eulert.