Resolution 107/97

RESOLUTION OF THE BOARD OF DIRECTORS NO. 107/97

SUBJECT: FINANCIAL SYSTEM - CREDIT TO FONDESIF FOR $US 27,057,716 WITH RESOURCES FROM THE IDA-1925-BO LINE.

SEEING:

The Financial Credit Agreement IDA-1925-BO for the Purpose of Financial Sector Adjustment, signed between the Republic of Bolivia, the Central Bank of Bolivia (BCB), and the International Development Association on June 24, 1988.

Supreme Decrees 24110 and 24336 of September 1, 1995, and December 13, 1996.

Law 1670 of October 31, 1995.

The Report from the Financial System Management No. 020/97 of April 29, 1997.

The Legal Advisory Report AL 18/97 of April 30, 1997.

Report 067 from the Economic Policy Advisory of April 30, 1997.

CONSIDERING:

That the Financial System Development and Productive Sector Support Fund (FONDESIF) has requested, via note FSF EXT 217/97 of April 30, 1997, a credit for $US 27,057,716 with resources from the IDA-1925-BO Line, which are administered under a fiduciary regime by the BCB.

That procedures have been initiated with the World Bank to obtain its non-objection for the use of the resources from said Line in strengthening the national financial system.

That according to the aforementioned reports, the BCB can attend to FONDESIF's request in its capacity as the Government's Financial Agent.

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Therefore,

THE BOARD OF DIRECTORS OF THE CENTRAL BANK OF BOLIVIA

RESOLVES:

Article 1.- Approve, subject to a resolutive condition, the granting of a loan to the Financial System Development and Productive Sector Support Fund for $US 27,057,716 (Twenty-seven million fifty-seven thousand seven hundred sixteen and 00/100 US Dollars), with resources from the IDA-1925-BO Line, via credit to the account maintained by FONDESIF at the Central Bank of Bolivia, under the following terms:

Amount: In Special Drawing Rights (SDRs) equivalent to $US 27,057,716.- Currency: United States of North America Dollars.
Interest Rate and Term: Under the same terms and conditions of term, interest, commissions, and payment method as those agreed upon by the International Development Association of the World Bank with the Republic of Bolivia in the IDA-1925-BO Credit Agreement, plus the cost of the currency risk coverage premium for dollars to SDRs on outstanding balances during the validity of the contract.

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Guarantee: Automatic debit of the equity constituted in trust by FONDESIF at the BCB, in the amounts necessary to honor the debt service with the World Bank, arising from the IDA-1925-BO Line.

Article 2.- If the BCB does not obtain the World Bank's conformity for the use of the resources from the IDA-1925-BO Line by May 12, 1997, the credit will be reversed retroactively to the date of its granting.

Article 3.- Until the aforementioned condition is verified, FONDESIF may not dispose of the resources credited to its account without explicit authorization from the BCB.

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

30.IV.97