RESOLUTION OF THE BOARD OF DIRECTORS NO. 070/2005

SUBJECT: MONETARY OPERATIONS MANAGEMENT – MODIFIES REGULATIONS ON OPEN MARKET OPERATIONS, OPERATIONS WITH SECURITIES ISSUED BY THE GENERAL TREASURY OF THE NATION FOR FISCAL POLICY PURPOSES, AND OPERATIONS FOR MONETARY REGULATION WITH SECURITIES ISSUED BY THE GENERAL TREASURY OF THE NATION OR THE CENTRAL BANK OF BOLIVIA.

HAVING SEEN:

Law No. 1670 of October 31, 1995.

Law No. 1834 of March 31, 1998.

The Statute of the Central Bank of Bolivia of December 13, 2001.

Board of Directors Resolutions 127/2003, 128/2003, and 129/2003 of November 11, 2003, and 017/2004 of February 10, 2004.

The Report from the Monetary Operations Management, SOMA No. 004/2005 of May 12, 2005.

The Report from the Legal Affairs Management, SANO No. 119/2005 of May 19, 2005.

CONSIDERING:

That Article 54, subsection o) of Law No. 1670 states that the Board of Directors has the authority to approve, modify, and interpret the Regulations of the Central Bank of Bolivia without the need for any additional administrative act.

That the Report from the Monetary Operations Management, SOMA No. 004/2005, recommends the modification of the Regulations on Open Market Operations, Operations with Securities issued by the General Treasury of the Nation for Fiscal Policy purposes, and Operations for Monetary Regulation purposes with securities issued by the General Treasury of the Nation or the Central Bank of Bolivia, to avoid the use of foreign currency cash as a form of payment or fund provision for open market operations, thereby eliminating the risks of receiving counterfeit currency at the Central Bank of Bolivia's Treasury.

That, in the opinion of the Legal Affairs Management, there is no legal impediment for the Board of Directors to approve the modifications to the aforementioned regulations.

THEREFORE,

THE BOARD OF DIRECTORS OF THE CENTRAL BANK OF BOLIVIA

RESOLVES.

Article 1.- Modify Article 15, subsection b) of the Regulation on Open Market Operations, as follows:

SAYS:

Article 15 (Requirements to Participate in Auction).

Entities participating in the public auction must provide funds in one of the following forms and certify the documents cited below or others at the request of the Central Bank of Bolivia:

b) By deposit equivalent to 2% of the nominal value of the demanded securities into the "Diverse Creditors – Open Market" account.

SHOULD SAY:

"Article 15: (Requirements to Participate in Auction).

Entities participating in the public auction must provide funds in one of the following forms and certify the documents cited below or others at the request of the Central Bank of Bolivia:

b) By deposit equivalent to 2% of the nominal value of the demanded securities into the "Diverse Creditors – Open Market" account. This deposit for titles in foreign currency may only be made via electronic transfer or check, and in the case of titles in national currency via electronic transfer, check, or cash deposit in national currency."

Article 2.- Modify Article 18, subsection b) of the Regulation on Operations with Securities issued by the General Treasury of the Nation for Fiscal Policy purposes, as follows:

SAYS:

Article 18.- (Fund Provision) To participate in the auction, authorized entities must provide funds in one of the following forms:

b) By deposit equivalent to 2% of the nominal value of the demanded securities into the "Diverse Creditors – Open Market" account.

SHOULD SAY:

"Article 18.- (Fund Provision) To participate in the auction, authorized entities must provide funds in one of the following forms:

b) By deposit equivalent to 2% of the nominal value of the demanded securities into the "Diverse Creditors – Open Market" account. This deposit for titles in foreign currency may only be made via electronic transfer or check, and in the case of titles in national currency via electronic transfer, check, or cash deposit in national currency."

Article 3.- Modify Article 17, subsection b) of the Regulation on Operations for Monetary Regulation Purposes with Securities issued by the General Treasury of the Nation or the Central Bank of Bolivia, as follows:

SAYS:

Article 17.- (Fund Provision) To participate in the auction, authorized entities must provide funds in one of the following forms:

b) By deposit equivalent to 2% of the nominal value of the demanded securities into the "Diverse Creditors - Open Market" account, authorized for this purpose by the Central Bank of Bolivia.

SHOULD SAY:

"Article 17.- (Fund Provision) To participate in the auction, authorized entities must provide funds in one of the following forms:

b) By deposit equivalent to 2% of the nominal value of the demanded securities into the "Diverse Creditors - Open Market" account, authorized for this purpose by the Central Bank of Bolivia. This deposit for titles in foreign currency may only be made via electronic transfer or check, and in the case of titles in national currency via electronic transfer, check, or cash deposit in national currency."

Article 4.- The modifications established in Articles 1, 2, and 3 of this Resolution shall enter into force from the date of their approval.

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

La Paz, May 24, 2005

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Juan Antonio Morales A.

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Enrique Ackermann A. José Luis Evia

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Fernando Paz B.