Resolution 042/2002

BOARD RESOLUTION NO. 042/2002
SUBJECT: ECONOMIC POLICY ADVISORY - APPROVES MODIFICATIONS TO THE REGULATION OF THE RESTRICTED SERVICE OF FOREIGN CURRENCY DEPOSITS AT THE BCB.

VIEWED:
The Law No. 1670 of October 31, 1995.

The Statute of the Central Bank of Bolivia of December 13, 2001.
Board Resolution No. 036/2002 of April 9, 2002.
The Report of the Economic Policy Advisory APEC-INEP No. 012/02 of April 30, 2002.

CONSIDERING:
That in virtue of the powers conferred by Articles 1, 2, 14, 18 and 38 subsections a) and f) of Law 1670, the Board of Directors of the BCB is authorized to create the Restricted Deposit Service at the BCB.

That the acceptance of short-term bank deposits with yield rates for monetary regulation purposes, with the aim of affecting the behavior of bank reserves and short-term interest rates, is a central bank operation.

That the Central Bank of Bolivia, through Board Resolution No. 036/2002, has created an account for the “Restricted Deposit Service,” as a mechanism to strengthen International Reserves and exert a decisive influence on short-term interbank interest rates.

That the initiation of these operations requires defining the treatment to be given to resources coming from abroad that are reversed before their maturity, as well as the fine that will be applied for insufficiency of funds.

That in accordance with what is provided in Article 54 subsection o) of Law 1670 and Article 11 numeral 30 of the BCB Statute, the Board may 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.

//2. B.D. No. 042/2002
THEREFORE,
THE BOARD OF DIRECTORS OF THE CENTRAL BANK OF BOLIVIA RESOLVES:

Article 1.- Include at the end of Article 6 of the Regulation of the Restricted Service of Foreign Currency Deposits, the following text:

“In the event of partial or total reversal of the investment, the exemption from the commission for transfer abroad will not be applied to the reversed amount.”

Article 2.- Add a new Article to the aforementioned Regulation, with the following text:

“Article 7.- In the event that a bank does not have sufficient funds in its foreign currency accounts at the BCB to carry out the investment committed in the auction, a fine of 0.5% on the missing amount of the investment will be applied to it, and the SRD-ME deposit will be constituted with the remaining balance.”

Article 3.- The aforementioned modifications will enter into force as of April 30, 2002.

Article 4.- The Presidency and the General Management are charged with the execution and compliance of this Resolution.

La Paz, April 30, 2002

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Juan Antonio Morales A.

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Juan Medinaceli V. Armando Méndez M.

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Roberto Camacho S. Javier Comboni S.

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Enrique Ackermann A.