Resolution 007/2013 Approving the Foreign Exchange Operations Regulations

BOARD RESOLUTION NO. 007/2013 SUBJECT: INTERNATIONAL OPERATIONS MANAGEMENT – APPROVES FOREIGN EXCHANGE OPERATIONS REGULATIONS

VIEWING: 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). Supreme Decree No. 1423 of December 5, 2012. The BCB Statute approved by Board Resolution No. 128/2005 of October 21, 2005 and subsequent modifications. Board Resolution No. 031/2009 of March 31, 2009, which approves the Foreign Exchange Operations Regulations. Board Resolution No. 153/2012 of August 22, 2012, which approves modifications to the Foreign Exchange Operations Regulations. The Report from the International Operations Management BCB-GOI-INF-2013-01 of January 2, 2013. The Report from the Legal Affairs Management BCB-GAL-SANO-INF-2013-3 of January 4, 2013.

CONSIDERING: That with Resolution No. 031/2009 the BCB Board approved the Foreign Exchange Operations Regulations. That with Resolution No. 153/2012 modifications were made to said Regulations. That Supreme Decree No. 1423 in its Article 12 establishes that the BCB must sell United States dollars to the general public. That the International Operations Management in its Report BCB-GOI-INF-2013-01 recommends approving a new Foreign Exchange Operations Regulations that includes provisions regarding the sale of United States dollars to the general public. That according to the Report from the Legal Affairs Management BCB-GAL-SANO-INF-2013-3, in accordance with the attribution conferred by Article 54 subsection o) of Law 1670, the Board is authorized to approve the BCB Regulations.

THEREFORE, THE BOARD OF THE CENTRAL BANK OF BOLIVIA RESOLVES: Article 1.- Approve the new Foreign Exchange Operations Regulations, which, as an annex, forms part of this present Resolution. Article 2.- From this date, repeal Board Resolutions Nos. 031/2009 and 153/2012, and any provision contrary to this Board Resolution. Article 3.- The Presidency and General Management are charged with the execution and compliance of this present Resolution. La Paz, January 8, 2013.

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Marcelo Zabalaga Estrada

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Gustavo Blacutt Alcalá Abraham Pérez Alandia

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Hugo Dorado Araníbar Rafael Boyán Téllez

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Rolando Marín Ibáñez

ANNEX FOREIGN EXCHANGE OPERATIONS REGULATIONS

CHAPTER I OBJECTIVE Article 1.- (Objective and Scope) The present Regulations aim to regulate the procedures for determining the exchange rate of the Boliviano and for the purchase and sale of United States dollars (USD) by the Central Bank of Bolivia (BCB) with financial entities and with the general public.

CHAPTER II EXCHANGE RATE POLICY Article 2.- (Objective and Nature of Exchange Rate Policy) The Exchange Rate Policy is directed to consolidate the process of inflation stabilization, promoting, as far as possible, the remonetization of the national economy to preserve the stability of the national financial system and mitigate the effects of external shocks. The Ministry of Economy and Public Finances, within the framework of this objective, will determine the nature of the exchange rate policy, in coordination with the BCB.

CHAPTER III SALE AND PURCHASE OF UNITED STATES DOLLARS (USD) Article 3.- (Sale of USD) The BCB will sell USD to financial entities and to the general public, through a competitive allocation mechanism, known as the "Bolsín" (Exchange Pool). The sale of USD and other currencies to the public sector will be carried out exclusively through the Ministry of Economy and Public Finances and will be assigned at the official selling exchange rate in effect on the date of the operation.

Article 4.- (Purchase of Currencies) The BCB will purchase USD from the public sector and the financial system at the buying exchange rate, crediting Bolivianos into accounts that entities maintain at the BCB.

CHAPTER IV MONETARY AND EXCHANGE RATE POLICY COMMITTEE Article 5.- (Attributions of the Monetary and Exchange Rate Policy Committee) Within the framework established in Chapter II of these Regulations, the Monetary and Exchange Rate Policy Committee, constituted in accordance with the BCB Statute, will have the following functions: a) Recommend to the Board modifications to the exchange rate policy for its coordination with the Ministry of Economy and Public Finances. b) Propose to the Board modifications regarding the modalities for implementing the exchange rate policy. c) Determine the daily offer amount in the Bolsín.

CHAPTER V DETERMINATION OF EXCHANGE RATE Article 6.- (Reference Currency for Exchange Rate) The exchange rate will be determined in relation to the United States dollar (USD).

Article 7.- (Official Selling Exchange Rate) The official selling exchange rate is defined as the minimum allocation price resulting from the Bolsín, if in the public sale the USD offered for the session are exhausted. In the event that there is a surplus of the offer, the official selling exchange rate will be the base quotation.

Article 8.- (Buying Exchange Rate) The buying exchange rate is defined as that resulting from subtracting a certain amount in Bolivianos, termed "differential," from the official selling exchange rate, which will be established by the BCB Board.

Article 9.- (Validity of Exchange Rate) The selling and buying exchange rates will enter into effect the day following the Bolsín session and will govern until the day of the next session.

CHAPTER VI SALE OF USD THROUGH THE BOLSÍN

Article 10.- (Administration of the Bolsín) The Bolsín will be administered by the International Operations Management of the BCB.

Article 11.- (Frequency of Bolsín Sessions) Bolsín sessions will be held every business day.

Article 12.- (Participants in the Bolsín) Financial entities that maintain a current and reserve account, reserve account, or current account at the BCB may participate in the Bolsín; this participation may be on their own behalf or on behalf of third parties. The general public may participate in the Bolsín, provided they maintain accounts in national currency and in USD at a financial entity that has accounts at the BCB.

Article 13.- (Submission of Requests) Requests to participate in the Bolsín session will be submitted through the means determined by the General Management of the BCB, detailing the amount of USD requested, with a minimum amount of USD 100,000.00 (One hundred thousand 00/100 United States dollars) and in multiples of said amount, the proposed exchange rate, and general information of the applicant.

Article 14.- (Deadline Hour) Proposals must be submitted to the BCB by 15:00 hours. Any modification to the deadline hour will be communicated to financial entities by the General Management of the BCB.

Article 15.- (Base Quotation) The Manager of International Operations will inform the President of the BCB of the proposals received in the Bolsín, who will set the base quotation for each session.

Article 16.- (Allocation of Currencies in the Bolsín) The base quotation will be communicated by the President of the BCB to the Manager of International Operations, who will instruct that the allocation of USD proceed in descending order of price, provided that the price of the proposals is greater than or equal to the base quotation, until the offer is exhausted. In the event that the amount of USD offered is not sufficient to meet the received proposals at the same exchange rate, the USD will be allocated under the pro-rata system. In this case, the financial entity and the public who participated in the Bolsín will be obligated to accept the allocation of partial amounts.

Article 17.- (Rejection of Requests) Rejected requests and the reason for rejection will be communicated to the financial entities and the public who participated, upon conclusion of the Bolsín session.

Article 18.- (Delivery of Currencies) On the same date of the Bolsín session, the current and reserve account, reserve account, or current account in national currency of the financial entity will be debited, and on the next business day, the allocated USD will be delivered by crediting their current and reserve account, reserve account, or current account in USD.

Article 19.- (Lack of Fund Provision) In the event that the financial entity does not have the resources in national currency in its current and reserve account, reserve account, or current account, by the deadline established in Article 14, its request will be rejected and it will be suspended from participating in Bolsín sessions for five (5) business days.

Article 20.- (Dissemination of Bolsín Results) The results of each Bolsín session will be disseminated on the day through the BCB website and news agencies.

CHAPTER VII PURCHASE AND SALE OF UNITED STATES DOLLARS (USD) BY THE FINANCIAL SYSTEM AND EXCHANGE HOUSES WITH THEIR CLIENTS AND USERS

Article 21.- (Maximum Selling Exchange Rate for USD) Entities supervised by the Financial System Supervision Authority (ASFI) and Exchange Houses will sell USD to their clients and users at an exchange rate not greater than one (1) cent of a Boliviano from the official selling exchange rate of the BCB in effect on the date of each operation.

Article 22.- (Minimum Buying Exchange Rate for USD) Entities supervised by the ASFI and Exchange Houses will purchase USD from their clients and users at an exchange rate not less than one (1) cent of a Boliviano from the buying exchange rate of the BCB in effect on the date of each operation.

Article 23.- (Coordination with ASFI) The BCB will coordinate with the ASFI the supervision and control of compliance by financial system entities with the provisions of Articles 21 and 22 of these Regulations.

Article 24.- (Application of Suspensions for Non-Compliance) Once the BCB receives information from the ASFI regarding non-compliance with these norms, the BCB will proceed to suspend the offending financial entity according to the following details: i) For the first non-compliance, suspension for 15 calendar days to buy and sell USD to the BCB. ii) For the second non-compliance, suspension for 30 calendar days to buy and sell USD to the BCB and to carry out open market operations (OMA) with the BCB. iii) For the third and subsequent non-compliances, suspension for 60 days to buy and sell USD to the BCB and to carry out open market operations (OMA) with the BCB.