BOARD OF DIRECTORS

BOARD RESOLUTION NO. 166/2023

SUBJECT: INTERNATIONAL OPERATIONS MANAGEMENT – MODIFICATION OF THE REGULATION ON GOLD PURCHASES IN THE INTERNAL MARKET FOR THE STRENGTHENING OF INTERNATIONAL RESERVES.

VIEWING:

• 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.
• Law No. 1503 of May 5, 2023, on the Purchase of Gold Destined to the Strengthening of International Reserves.
• The Statute of the BCB approved by Board Resolution No. 095/2022 of October 6, 2022.
• The Regulation for the Administration of International Reserves, approved by Board Resolution No. 071/2023 of May 9, 2023 and its modifications.
• The Regulation on Gold Purchases in the Internal Market Destined to the Strengthening of International Reserves, approved by Board Resolution No. 096/2023 of July 3, 2023 and its modifications.
• The Technical Report BCB-GOI-SRES-DOI-INF-2023-89 of December 19, 2023, issued by the International Operations Management (GOI).
• The Legal Report BCB-GAL-SANO-INF-2023-14 of December 21, 2023, issued by the Legal Affairs Management (GAL).

CONSIDERING:

That Articles 327 and 328 of the CPE determine that the BCB is a public law institution, with legal personality and its own assets, which, within the framework of the State's economic policy, has the function of maintaining the internal purchasing power stability of the currency, to contribute to economic and social development, being its attribution, in coordination with the economic policy determined by the Executive Branch, to administer international reserves.

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That Article 1 of Law No. 1670, modified by Article 64, section A3, numeral 1) of Law No. 1864 of June 15, 1998 on Property and Popular Credit, establishes that the BCB is a State institution, of public law, of an autarkic nature, of indefinite duration, with legal personality and its own 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 14 of Law No. 1670 establishes that the BCB will ensure the strengthening of International Reserves so that they allow the normal functioning of Bolivia's international payments.

That Article 15 of Law No. 1670 provides that the BCB's International Reserves are constituted by one or more of the assets among which physical Gold is included.

That Article 16 of Law No. 1670 determines that the BCB will administer and manage its International Reserves, being able to invest and deposit them in custody, as well as dispose of and pledge them, in the manner it considers most appropriate for the fulfillment of its purpose and functions and for their adequate safeguarding and security. It may, likewise, purchase foreign exchange hedging instruments with the objective of reducing risks.

That Article 17 of Law No. 1670 provides that International Reserves are immune from attachment and cannot be subject to precautionary, administrative or judicial measures or be subject to any state tax or contribution.

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 regulations of general application and internal rules; as well as establishing administrative, operational and financial strategies of the BCB, approving their respective short and medium-term programs. For the monitoring and oversight of their execution, it will have independent analysis and audit information and services.

That subsections a), c) and o) of Article 54 of Law No. 1670, indicate as attributions of the Board of Directors the following: a) Issue the rules and adopt the general decisions that would be necessary for the BCB to fulfill the functions, competencies and powers assigned to it by Law; c) Monitor the execution of monetary, exchange, credit, financial intermediation, international reserves administration policies and regulations and others that correspond to the BCB in accordance with Law No. 1670; and o) 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.

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That Articles 1 and 3 of Law No. 1503 provide that its object is to authorize the BCB to purchase gold from the internal market for the strengthening of International Reserves and to carry out financial operations with International Reserves in gold in international markets, falling under its scope of application individuals and legal entities, public and private, legally established, registered and authorized by competent entities, that participate in the marketing of gold.

That Articles 4 and 5 of the aforementioned Law No. 1503 establish that for the purchase of gold in the internal market, the BCB will pay in national currency, taking as a base the price of the international gold quotation, under competitive conditions, in accordance with regulations issued by said Issuing Entity and will establish the conditions, characteristics, periodicity, limits and procedures for the acquisition of gold from the internal market, in accordance with regulations issued by the BCB.

That the Second Transitory Provision of said Law provides that the BCB, for the fulfillment of Law No. 1305, will establish the conditions, characteristics and procedures, through regulations issued by its Board of Directors.

That numerals 1) and 3) of Article 5 of the BCB Statute provide that its Board of Directors has regulatory competence to issue specialized rules 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 purpose.

That Article 6 and numerals 1), 6) and 30) of Article 10 of the BCB Statute, provide that the Board of Directors has the attributions to approve general decisions and issue the rules that would be necessary for the BCB to fulfill the functions, competencies and powers assigned to it by Law, approve the policy and rules for the administration of International Reserves, as well as monitor their execution, as well as 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 paragraph I of Article 24 of said norm, provides that resolutions and decisions of the Board of Directors are adopted by a simple majority of votes of its members present at a meeting, except in cases where Law No. 1670 or the BCB Statute require qualified majorities.

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 may also do so through decisions that will be expressly recorded in the minutes. Likewise, any project

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of Board of Directors 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 9 and paragraph I of Article 11 of the Regulation for the Administration of International Reserves establishes that the structure of International Reserves is composed of International Monetary Reserves, Gold Reserves and SDR Holdings; and that Gold Reserves are constituted by physical gold in BCB vaults, investments in time deposits and balances in gold accounts.

That Articles 1 and 3 of the Regulation on Gold Purchases in the Internal Market Destined to the Strengthening of International Reserves approved by Board Resolution No. 096/2023 establish as its object to establish the regulation of Law No. 1503 and the requirements for the purchase of gold in any of its forms and states, in the internal market by the BCB, destined to the strengthening of international reserves being the scope of application all individuals and legal entities, public and private legally established, registered and authorized by competent entities voluntarily in the marketing of gold to the BCB. It also provides that the purpose of the regulation is to regulate and establish the mechanisms and formalities for the purchase of gold within the internal market destined to the strengthening of international reserves and to define the requirements to market gold with the BCB.

That Report BCB-GOI-SRES-DOI-INF-2023-89, recommends putting before the Board of Directors the approval of the modification of Article 12 of the Regulation on Gold Purchases in the Internal Market Destined to the Strengthening of International Reserves, with the object that it be more generic and consistent with Annex I.

That Legal Report BCB-GAL-SANO-INF-2023-14, concludes that in accordance with the GOI Report, the proposal to modify Article 12 of the Regulation on Gold Purchases in the Internal Market Destined to the Strengthening of International Reserves has the object that the gold purchases made by the Issuing Entity have greater scope and that a greater number of gold suppliers can be available, being viable for approval; recommending the Board of Directors of the BCB to approve the modification to the Regulation on Gold Purchases in the Internal Market Destined to the Strengthening of International Reserves.

THEREFORE,

THE BOARD OF DIRECTORS OF THE CENTRAL BANK OF BOLIVIA

RESOLVES:

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Article 1.- Approve the modification of Article 12 of the Regulation on Gold Purchases in the Internal Market Destined to the Strengthening of International Reserves, approved by Board Resolution No. 096/2023 of July 3, 2023 and its modifications, with the following text:

“Article 12. (Quantity). The BCB will carry out purchases in the internal market in accordance with its monetary program and as established in Annex I – Calculation Methodology. For lower quantities, sellers may trade with other participants in the internal market freely as stated in paragraph II of Article 3 of Law No. 1503.”**

Article 2.- This Resolution will enter into force from its publication.

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

La Paz, December 21, 2023

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