Regulatory Alerts2009-12-15 | Resolución 144/2009Added · Updated
Resolution 144/2009
The Board of Directors of the Central Bank of Bolivia amends Article 4 of the Foreign Exchange Position Regulation for banking and non-banking financial entities to reduce allowable foreign exchange position limits. Effective March 16, 2010, the long position limit for the sum of foreign currency, MVDOL, and OME is lowered from 70% to 60% of accounting equity, while the long position limit for MNUFV is reduced from 20% to 15%. Additionally, a stricter limit of 10% for MNUFV long positions takes effect on June 1, 2010, while the short position limit remains unchanged at 20%.
BOARD RESOLUTION NO. 144/2009 SUBJECT: ECONOMIC POLICY ADVISORY – APPROVES MODIFICATION TO THE FOREIGN EXCHANGE POSITION REGULATION FOR BANKING AND NON-BANKING FINANCIAL ENTITIES.
HAVING SEEN: The Political Constitution of the State promulgated on February 7, 2009. Law No. 1670 of October 31, 1995, of the Central Bank of Bolivia (BCB). The BCB Statute approved by Board Resolution No. 128/2005 of October 21, 2005, modified by Board Resolutions No. 31/2006, No. 021/2008, No. 106/2009, and No. 112/2009 of April 18, 2006, February 26, 2008, September 8, 2009, and September 29, 2009, respectively. Board Resolution No. 122/2007 of September 25, 2007, which approves the Foreign Exchange Position Regulation of the Financial System, modified by Board Resolutions No. 154/2007 and No. 038/2008 of December 18, 2007, and March 25, 2008, respectively. Technical Report APEC-INEP No. 041/2009 of December 10, 2009 from the Economic Policy Advisory. Report SANO No. 402/2009 of December 11, 2009 from the Legal Affairs Management.
CONSIDERING: That the Political Constitution of the State provides in its Article 328 that the BCB is authorized, in coordination with the economic policy determined by the Executive Branch, to execute foreign exchange policy. That pursuant to Article 19 of Law No. 1670, the BCB will establish the foreign exchange regime and execute foreign exchange policy. That the BCB Board of Directors, in accordance with Articles 44 and 54 subsections a) and q) of Law No. 1670 and Article 11 numeral 12) of the BCB Statute, has
//2. B.D. No. 144/2009 approved Board Resolution No. 122/2007 through which the Foreign Exchange Position Regulation of mandatory compliance for Institutions of the Financial System comes into force, starting January 1, 2008. That through Board Resolution No. 154/2007, the Board of the Issuing Entity approved the extension until April 1, 2008, of the deadline for the application of the Foreign Exchange Position Regulation of the Financial System for Institutions of the Mutual System and Cooperatives. That the Board of the Issuing Entity through Board Resolution No. 038/2008 authorized specific limits on long positions in foreign currency and the application deadlines for institutions of the Mutual System and Cooperatives. That as recommended by the Economic Policy Advisory in its Report APEC-INEP No. 041/2009, it is necessary to reduce the limits on foreign exchange positions, both in foreign currency, MVDOL, and OME, as well as in UFV. That according to what is stated in Report SANO No. 402/2009, the proposal to modify the Foreign Exchange Position Regulation is legally appropriate, as it does not contravene the current legal framework, and it is within the competence of the Board of Directors of the Central Bank of Bolivia to consider its approval. That pursuant to Article 54 subsection o) of Law No. 1670, the Board has the authority to 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.
THEREFORE, THE BOARD OF DIRECTORS OF THE CENTRAL BANK OF BOLIVIA RESOLVES:
Article 1.- Approve the modification of Article 4 of the Foreign Exchange Position Regulation for Banking and Non-Banking Entities as follows:
SAYS: Article 4 (Foreign Exchange Position Limits). Banking and non-banking financial entities may maintain a foreign exchange position according to the following rules: a) For the sum of foreign currency, MVDOL, and OME, the limits are as follows: A long position up to the equivalent of 70% (SEVENTY PERCENT) of the value of accounting equity. A short position up to the equivalent of 20% (TWENTY PERCENT) of the value of accounting equity. b) A long position in MNUFV up to the equivalent of 20% (TWENTY PERCENT) of the value of accounting equity.
SHOULD SAY: “Article 4 (Foreign Exchange Position Limits). Banking and non-banking financial entities may maintain a foreign exchange position according to the following rules: a) For the sum of foreign currency, MVDOL, and OME, the limits are as follows: A long position up to the equivalent of 60% (SIXTY PERCENT) of the value of accounting equity, effective from March 16, 2010. A short position up to the equivalent of 20% (TWENTY PERCENT) of the value of accounting equity. b) A long position in MNUFV up to the equivalent of 15% (FIFTEEN PERCENT) of the value of accounting equity, effective from March 16, 2010. A long position in MNUFV up to the equivalent of 10% (TEN PERCENT) of the value of accounting equity, effective from June 1, 2010.”
//4. B.D. No. 144/2009
Article 2.- The modification made to Article 4 of the Foreign Exchange Position Regulation for Banking and Non-Banking Entities will come into force according to the dates set forth in the previous article.
Article 3.- The Presidency and General Management are charged with the execution and compliance of this Resolution.
La Paz, December 15, 2009.
Gabriel Loza Tellería
Hugo Dorado Araníbar Rolando Marín Ibáñez
Ernesto Yáñez Aguilar Rafael Boyán Téllez