Resolution 016/2004 — BCB — BO

BOARD RESOLUTION NO. 016/2004
SUBJECT: MONETARY OPERATIONS MANAGEMENT – APPROVES CREDIT TO THE GENERAL TREASURY OF THE NATION TO MEET TEMPORARY LIQUIDITY NEEDS OF Bs80,000,000.

SEEN:
The Law 1670 of October 31, 1995.
The Board Resolution No. 160/97 of October 21, 1997, which approves the Regulations for Credits to the Public Sector.
The Board Resolution No. 121/2001 of November 29, 2001, which modifies Article 10 of Board Resolution No. 160/97 regarding the Financial Conditions of Credits to the Public Sector. The Memorandum of Understanding signed between the BCB and the Ministry of Finance on December 4, 2003. The note from the Ministry of Finance D.G.C.P. 05-016 D.D.I. OF. No. 0329/04 of February 9, 2004. The Report from the Monetary Operations Management SOSP 007/2004 of February 10, 2004. The Report from the Economic Policy Advisory APEC-SMyF-008/2004 of February 10, 2004. The Report from the Legal Affairs Management SANO No. 028/2004 of February 10, 2004.

CONSIDERING:
That the Ministry of Finance, through note D.G.C.P. 05-016 D.D.I. OF. No. 0329/04, has requested the granting of a credit of Bs100,000,000 to meet temporary liquidity needs.

That Article I, subsection A) of the Memorandum of Understanding establishes that the balance for liquidity credits "may be increased exceptionally if there is a sustained accumulation of deposits from the rest of the Non-Financial Public Sector (NFPS) in the BCB."

That the Monetary Operations Management, in accordance with Article 5 of the Regulations for Credits to the Public Sector, has issued Report SOSP 007/2004, which recommends the conditions under which the credit should be subject.

That the Economic Policy Advisory in its Report APEC-SMyF-008/2004, within the framework of the Memorandum of Understanding signed between the BCB and the Ministry of Finance, points out that there is an accumulation of deposits in the BCB from the Rest of the Entities of the Non-Financial Public Sector, the amount of which varies depending on whether the variation is considered with the total average balance or the balance of the most recent week.

That the APEC Report considers that "... since only one month and ten days have passed in the 2004 management, it is difficult to determine if the accumulation of deposits observed to date has a sustained character or not," and therefore recommends to the BCB Board of Directors to restrict the credit term to a period no greater than 45 days.

That the Legal Affairs Management, in Report SANO 028/2004, establishes that there is no legal impediment for the Board of Directors of the Issuing Entity to consider the granting of a Credit to the TGN for an amount of Bs100,000,000, requested by the Ministry of Finance, prior to compliance with what is established in the Regulations for Credits to the Public Sector and subsection A) of Article I of the Memorandum of Understanding of December 4, 2003.

THEREFORE,

THE BOARD OF DIRECTORS OF THE CENTRAL BANK OF BOLIVIA

RESOLVES:

Article 1.- Approve, exceptionally, a credit to the Ministry of Finance for the attention of temporary liquidity needs, under the following conditions:
Amount: Bs80,000,000.
Interest Rate: 8.00%.
Term: 45 days.
Disbursement Date: February 13, 2004.
Maturity Date: March 29, 2004.
Guarantee Instrument: Treasury Letters "C".
Disbursement Method: In accounts of the General Treasury of the Nation, according to written request.
Payment Method: Interest and principal, via automatic debit in the current fiscal accounts held by the General Treasury of the Nation at the Central Bank of Bolivia.

Article 2.- Authorize the President of the Central Bank of Bolivia to sign the respective contract with the Ministry of Finance.

Article 3.- The General Treasury of the Nation may effect total or partial early cancellation of the Credit considering the accrued interest on the total Credit up to the date of early cancellation.

Article 4.- Any restructuring of the Credit will be subject to the limits and to the verification that the accumulation of deposits in the BCB of the rest of the Entities of the Non-Financial Public Sector (NFPS) is sustained, in accordance with what is established in the Memorandum of Understanding signed between the BCB and the Ministry of Finance on December 4, 2003.

Article 5.- The Presidency and the General Management are in charge of the execution and compliance with this Resolution.

La Paz, February 10, 2004

Juan Antonio Morales A.

Juan Medinaceli V. Enrique Ackermann A.

José Luis Evia V. Fernando Paz B.

Jaime Apt B.