Encaje Legal En Bolivia 2020

The application of the legal reserve is provided for in article 26, literally (b) of the Act. Thus, when monetary authorities increase the legal reserve, financial institutions complain because they find that their level of profitability is falling or choose, as they have just announced, to raise interest rates and maintain their profit levels. Now the legal reserve applies to deposits received from banks, and since it is now 14.3%, the example of the bank that receives deposits per 100 pesos must hold 14.30 pesos of the statutory reserve in the central bank. This means that you can only use 85.70 pesos to lend them later and make a profit on the interest rate. Until last week, the legal reserve, which applies to several banks, was 12.3% and was increased by the central bank to 14.3% to stop the rise in the dollar exchange rate. In AAyP and savings banks, minimum reserves increased from 8.1% to 10.1%. The following example shows an idea of how the legal reserve is applied: a commercial bank`s profits are derived from the return it makes on the deposits it receives. That is, when a bank receives 100 pesos of deposits, it pays a passive interest rate of 3% per year to the depositor and lends this 100 pesos to the public, to which it charges an annual active rate of 18%. Funds from loans in local currency with a maturity of at least 11 months must be used for the purchase of domestic products and the payment of services of Bolivian origin.

The banknotes and coins it issues are means of payment that are legal tender throughout the national territory and have unlimited exemption powers. The notes must bear the signature of the President and Chief Executive Officer of BCB and the serial number. Minimum reserves and deposits made by financial intermediation companies in the BCB are not subject to judicial seizure or retention by third parties. The legal reserve is not only a support for the support of the sector, i.e. the solvency of banks, but also a monetary instrument to limit or increase working capital. If the percentage of the legal reserve is reduced, the money supply increases, and if it increases, then the money supply is reduced. The reserve requirement may be extended by regulation to other passive, conditional or service transactions if the Monetary John takes this into account. Failure to comply with the tipping obligation will result in the corresponding penalty in accordance with Article 67 (c) of this Law.

This reserve is called a statutory reserve and is used for deposits in domestic and foreign currencies. A bank cannot invest everything it receives from deposits because it would run the risk of running out of cash and going bankrupt. To avoid this situation, the central bank obliges them to keep a percentage of the deposits in their possession. The legal reserve requirement does not generally apply to all institutions, it depends on the value of their assets and the amounts deposited by savers with each institution, so the formula for determining it would be as follows: Statutory reserve = assets of the banking system or reserves (ACSB) between deposits delivered by savers to the bank (D). The reserve rate for cash deposits in national currency fell from 6 per cent to 5.5 per cent and that for foreign currency deposits from 13.5 per cent to 10 per cent. For securities and term deposits in national currency, the minimum reserve requirement was reduced from 5% to 4.5%. Money and finance 183-02. This paragraph states: «Financial intermediaries are subject to the legal reserve, i.e. the obligation to hold in the central bank or, if determined by the Monetary Council, a percentage of all funds collected by the public in any modality or instrument in national or foreign currency. In general, 90% of statutory reserve funds are deposited with the central bank and the remaining 10% with the financial institutions themselves, based on the corresponding amounts. The BCB will inject about 4,000 million Boliviano (about $575 million) by relaxing the legal reserve rate and increasing the funds held, which will allow the population to have resources through the financial system that cannot charge more than 3% annual interest.

The BCB regulates the volume of domestic loans according to its monetary programme. To this end, it issues, places or acquires securities (bills of exchange, bonds, promissory notes and others) and carries out other open market operations. It also has the power to establish minimum reserves for financial intermediaries. Statutory minimum reserves are percentages of the total deposits that companies in the financial system must hold as minimum reserves in the BCB. «The Board of Directors of the Central Bank of Bolivia is lowering the ratio of legal reserve requirements, which was in effect in local currency and foreign currencies, in order to promote access to loans for Bolivian families with a maximum interest rate of 3% per year for the purchase of domestic products,» the BCB said in a statement. The BCB conducts an exchange rate policy by regulating the conversion from Bolivian to the currencies of other countries. This policy aims to alleviate external inflationary pressures and preserve the stability of the financial system. LA PAZ, July 6 (Xinhua) — The Central Bank of Bolivia (BCB) announced today that it has lowered the current reserve requirement ratio to «promote access to credit for Bolivian families» with a lower interest in consuming Bolivian goods and services. This condition makes the legal reserve an ideal instrument for the application of monetary policy in certain circumstances. The increase in reserve requirements also widens the gap between passive interest rates (which the bank pays to depositors) and the active interest rate (which borrowers pay to the bank), as they can only lend 85.7% of the deposits they receive and have to pay interest on 100% of these deposits. It is necessary to offer a low passive rate and charge high active rates.

The legal bank reserve, also known as the cash ratio, is the percentage of a bank`s currency that must be held in liquid reserves and therefore cannot be used for investments or loans. It is the monetary authorities of each country that will set this minimum percentage of reserves that all financial institutions must respect. However, there are financial institutions that generally maintain a higher percentage than indicated by the authorities. Financial intermediaries (several banks, savings and credit associations, development banks, savings and credit unions, and even the Agricultural Bank) are required to hold at the Central Bank or in any other place determined by the Monetary Committee a certain percentage of the amount of deposits collected by any modality.