Resolution 054/99 Approving New Limits for Gold Reserves Investment Abroad

BOARD RESOLUTION NO. 054/99 SUBJECT: INTERNATIONAL AFFAIRS – APPROVES NEW LIMITS FOR INVESTMENT ABROAD OF GOLD RESERVES.

HAVING VIEWED: Law 1670 of October 31, 1995, Chapter II, regarding the functions of the Central Bank of Bolivia (BCB) in relation to International Reserves. Board Resolution No. 080/97 of February 18, 1997, which approves the Regulations for the Administration of International Reserves. Board Resolution No. 156/97 of October 14, 1997, which approves the investment of International Reserves in gold. Report GAI No. 011/99 from the International Affairs Management of June 25, 1999. Report UAJUR No. 434/99 from the Legal Affairs Unit of June 25, 1999.

CONSIDERING: That Report GAI No. 011/99 determines that the process of investing International Reserves in gold, authorized by Board Resolution No. 156/97, has been duly fulfilled, resulting in all gold bars of the Central Bank of Bolivia having the "London Good Delivery Bar" certification.

That Article 23 of the Regulations for the Administration of International Reserves stipulates that the BCB Board of Directors will authorize the maximum percentage of gold reserves to be invested abroad.

That Article 2, subsection a) of Board Resolution 156/97 stipulates that up to 50% of gold reserves be invested abroad, maintaining a minimum of 50% in BCB vaults.

//2. B.R. No. 054/99 That Report No. 011/98 from the International Affairs Management recommends investing a portion of the gold currently deposited in the BCB vault abroad, through the establishment of term deposits.

That according to Report UAJUR No. 434/99 from the Legal Affairs Unit, it is within the authority of the Board of Directors to approve these operations.

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

Article 1.- Authorize new limits for gold investment abroad, up to 60% of total gold holdings in July, 67.5% in August, and 75% starting from September 1999, with a minimum of 40% to be maintained in vault in July, 32.5% in August, and 25% starting from September 1999.

Article 2.- Approve the investment in term deposits of up to seven point eight (7.8) tons of gold, currently deposited in the vault of the Central Bank of Bolivia, in accordance with the limits set forth in Article 1 of this Resolution and in conformity with the Regulations for the Administration of International Reserves.

Article 3.- The International Reserves Administration Committee shall be in charge of approving gold reserve investments, and must establish an investment schedule of 3 term deposits, with a maximum of two point seven (2.7) tons of gold each, to be established monthly until September 30, 1999. These investments must be executed applying the same procedures contemplated in Board Resolution No. 156/97, including competitive mechanisms based on a net deposit rate that incorporates a global discount for transport and insurance to the gold investment centers.

Article 4.- Upon completion of the gold investment process, the International Reserves Administration Committee, through the International Affairs Management, will present a report to the Board of Directors on the execution of the schedule and the performance of said investment.

//3. B.R. No. 054/99 Article 5.- Repeal Article 2, subsection a) of Board Resolution No. 156/97.

Article 6.- The Presidency and General Management are tasked with the execution and compliance of this Resolution.

La Paz, June 29, 1999

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Juan Antonio Morales A.

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Armando Pinell S. Jaime Ponce G. Juan Medinaceli