Resolution 042/2004 — BCB — BO

BOARD RESOLUTION NO. 042/2004
SUBJECT: MONETARY OPERATIONS MANAGEMENT – APPROVES CREDIT TO THE GENERAL TREASURY OF THE NATION TO ADDRESS TRANSITORY LIQUIDITY NEEDS OF Bs100,000,000.-

HAVING SEEN:
Law No. 1670 of October 31, 1995.
Board Resolution No. 160/97 of October 21, 1997, which approves the Regulations for Credits to the Public Sector.
Board Resolution No. 121/2001 of November 29, 2001, which modifies Article 10 of Board Resolution 160/97 regarding the Financial Conditions of Credits to the Public Sector. Board Resolution No. 016/2004 of February 10, 2004. The Memorandum of Understanding signed between the BCB and the Ministry of Finance on December 4, 2003. The Addendum to the Memorandum of Understanding, dated April 1, 2004. The note from the Ministry of Finance D.G.C.P. 05-016 D.D.I. OF. No. 0680/04 of March 26, 2004. The Report from the Monetary Operations Management SOSP 014/2004 of March 31, 2004. The Report from the Economic Policy Advisory APEC-SMyF 015/2004 of April 1, 2004. The Report from the Legal Affairs Management SANO No. 063/2004 of March 30, 2004.

CONSIDERING:
That the Ministry of Finance, through note DGCP 05-016 D.D.I. OF. No. 0680/04, has requested a credit of Bs450,000,000.- to address transitory liquidity needs.

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That the Addendum of April 1, 2004, to the Memorandum of Understanding, contemplates the possibility of granting new liquidity credits to the TGN, provided that there is a sustained accumulation of deposits from the rest of the Entities of the Non-Financial Public Sector, which allows neutralizing the expansion of Monetary Emission. That the Addendum of April 1, 2004, defines the calculation to determine the amount of sustained and transitory accumulation of deposits. That the Monetary Operations Management, in accordance with Article 5 of the Regulations for Credits to the Public Sector, has issued Report SOSP 014/2004, which recommends the conditions to which the credit requested by the Ministry of Finance should be subject. That the Economic Policy Advisory in Table No. 3 of Report APEC-SMyF-015/2004, establishes a sustained accumulation of deposits from the rest of the Entities of the Non-Financial Public Sector of Bs100.0 million, and recommends considering the granting of a credit up to Bs100.0 million with a maximum term of 90 days. That the Legal Affairs Management, in its Report SANO No. 063/2004, establishes that there is no legal impediment for the Board of the Issuing Entity to consider granting a credit to the TGN for an amount of Bs450,000,000, requested by the Ministry of Finance, through note D.G.C.P. 05-016 D.D.I. OF. No. 0680/04, 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, which states that “During the 2004 management period, the debt balance for liquidity credits will be subject to a limit that may be exceptionally increased if there is a sustained accumulation of deposits in the BCB from the rest of the Entities of the Non-Financial Public Sector (SNPF). This balance may be reviewed downward in accordance with the monetary and financial program agreed upon for the 2004 management period.”

THEREFORE,
THE BOARD OF DIRECTORS OF THE CENTRAL BANK OF BOLIVIA RESOLVES:

Article 1.- Approve a credit to the Ministry of Finance for the attention of transitory liquidity needs, under the following conditions:
Amount: Bs100,000,000.-
Interest Rate: 7.75 %
Term: 88 days.

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Disbursement Date: April 5, 2004
Maturity Date: July 2, 2004
Guarantee Instrument: Treasury Letters “C”.
Payment Method: Interest and principal, via automatic debit in the fiscal current accounts that the General Treasury of the Nation holds at the Central Bank of Bolivia.

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

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

Article 4.- Any rescheduling of the credit will be subject to the financing limits of the BCB to the General Treasury of the Nation, in accordance with what is established in the Memorandum of Understanding signed between the BCB and the Ministry of Finance on December 4, 2003, and the Addendum to the Memorandum of Understanding, dated April 1, 2004.

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

La Paz, April 1, 2004

Juan Medinaceli V.

Enrique Ackermann A. José Luis Evia V.

Fernando Paz B. Jaime Apt B.