Fontier Asia: Monetary Policy Frameworks Main …...The Bangladesh Bank (BB) has as its main objectives to stabilize the domestic monetary value and external competitiveness of the

Fontier Asia: Monetary Policy Frameworks—Main Provisions of Central Bank Legislation as of 2012–13

Bangladesh Bhutan Cambodia Lao P.D.R. Maldives Mongolia Myanmar Nepal Papua New Guinea Timor-Leste Vietnam

Policy

Mandate

Central bank

objective

The Bangladesh Bank (BB)

has as its main objectives

to stabilize the domestic

monetary value and

external competitiveness of

the Bangladesh taka to

foster growth and

development of the

country's productive

resources in the best

national interest.

The Royal Monetary

Authority (RMA) Act of

Bhutan 2010 stipulates that

the primary objective of the

RMA shall be to formulate

and implement monetary

policy with a view to

achieving and maintaining

price stability.

The National Bank of

Cambodia's (NBC)'s main

objective is to determine

and direct the monetary

policy aimed at maintaining

price stability to facilitate

economic development

within the framework of

Cambodia's economic and

financial policy.

The decree on the

organization and activities

of the Bank of Lao PDR

(BoL) that was signed by

the prime minister in 2000

states that the role of the

BoL is to promote and

stabilize the value of the

kip within the country and

abroad (Article 1). The

decree further states that

the role of the BoL is to

promote, facilitate, and

control monetary

circulation so that it

contributes to economic

growth in line with the

national socioeconomic

development plan. The BoL

law (as amended in 1999)

instructs the BoL to

implement policy on

foreign currency control

and the exchange rate

(Article 4). The law also

instructs the BoL to

manage and adjust the

money supply in circulation

in accordance with the

approved plan of the

government.

The principal purposes of

the Maldives Monetary

Authority (MMA) shall be

to:

(a) issue currency and

regulate the availability,

and international

value of the Maldivian

rufiyaa;

(b) provide advisory

services to the government

on banking and

monetary matters;

(c) supervise and regulate

banking so as to promote a

sound

financial structure; and

(d) promote inside and

outside the country the

stability of

Maldivian currency and

foster financial conditions

conducive to

the orderly and balanced

economic development of

Maldives.

The Bank of Mongolia

(BOM) law stipulates the

main objective of BOM

shall be to ensure stability

of the national currency.

Within its main objective,

BOM shall promote

sustainable development of

the national economy,

through maintaining the

stability of the financial

markets and the banking

system (Article 4). The

monetary policy guidelines

(Article 10), formulated on

an annual basis, state that

the aim of monetary policy

is to maintain low and

stable inflation over the

medium term.

The Central Bank of

Myanmar (CBM) law

indicates that the aim of the

CBM is to preserve the

value of the Myanmar

currency, the kyat. In

accordance with this goal

the CBM pursues the

objectives of: (a) promoting

monetary and financial

system stability; (b)

promoting an efficient

payments and settlement

system and a liquid,

solvent, and properly

functioning financial

system; and (c) fostering

monetary, credit, and

financial conditions

conducive to orderly,

balanced, and sustained

economic development.

The central bank (Nepal

Rastra Bank; NRB)

stipulates that the objective

of NRB shall be to

formulate necessary

monetary and foreign

exchange policies to

maintain the stability of

price and balance of

payments for sustainable

development of the

economy; to promote

stability and liquidity

required in the banking and

financial sector; and to

develop a secured and

efficient system of payment

(Article 4).

The main objectives of the

Bank of Papua New Guinea

(BPNG) BPNG are (i)

achieving and maintaining

price stability, (ii) stability

of the financial system, (iii)

promoting an efficient

payment system, and (iv)

promoting macro-economic

stability and economic

growth.

The Central Bank of Timor-

Leste (CBTL) has as its

objective to achieve and

maintain domestic price

stability, to promote and

maintain a stable and

competitive financial

system, and to support the

general economic policies

of the government.

Although the State Bank of

Vietnam (SBV) law states

the objective for monetary

policy is “stabilizing

currency value expressed

by the inflation target,”

monetary policy has in

practice been guided by

several other objectives,

including promoting

economic growth,

containing inflation,

stabilizing the exchange

rate, and preserving

financial stability.

Political

Autonomy



Government

body of the

central bank

Board of Directors with

nine members, including

the Governor as Chairman

and one Deputy Governor,

four Directors who are not

government officials, and

three government officials

nominated by the

government.

Seven member Board of

Directors comprising the

Governor and two Deputy

Governors of the RMA,

and four other members

appointed by the

government from outside

the RMA, one of whom

shall be from the Ministry

of Finance.

The Board consists of

seven members, including

the Governor, the Deputy

Governor, and five other

members: a representative

of the head of the Royal

Government, a

representative of the

Ministry of Economy and

Finance, a member from

the real economy, one from

academia, and a

representative of the

National Bank staff.

The BoL decree stipulates

that the executive board is

the top administrative

organization of the BoL.

The BoL law states that the

Board of Directors of the

BoL shall consist of the

Deputy Prime Minister as

the Chairman of the Board;

the Governor of the BoL as

the Vice Chairman; the

Minister of Finance as the

second Vice Chairman; the

Vice Governor of the BoL

as a member; and other

members who are people

with competence and

experiences in agriculture,

industry, trade, banking,

and finance, selected from

various sectors.

The Board consist of:

the Governor,

Deputy Governor,

an official from MMA's

economic research and

statistics sector or the

financial sector,

an official nominated by the

Minister of Finance and

Treasury,

an appointee from the

economic sector of the

government other than the

Ministry of Finance and

Treasury, and

two appointees from the

private sector.

The Board of Directors

advises the Governor on the

monetary policy stance and

helps the Governor decide

the policy rate (Article 27).

The Board consists of the

Governor, two Deputy

Governors, the Governor's

advisors, and 10 Directors

of departments.

The CBM law indicates

that the Board can

comprise from 7 to 15

members; at least 5 are

appointed by the

government. De facto,

however, currently, the

CBM is a department

within the Ministry of

Finance and Revenue

(MoFR), with some core

central banking functions

also undertaken by two

state banks, Myanma

Economic Bank and

Myanma Foreign Trade

Bank. There are plans to

grant CBM more

operational autonomy after

the adoption of a new CBM

law.

The Board of NRB consists

of seven members, the

Governor, Secretary

(Ministry of Finance), two

Deputy Governors, and

three Directors (Article 14).

The Governor is

responsible for formulating

and implementing monetary

policy and the regulation of

the financial system. The

Board of the Central Bank,

which consists of 9 to 11

members, is responsible for

other policies.

The Governing Board is

comprised of the Governor,

two Deputy Governors, and

four non-executive

members.

There is no governing body

of the SBV. The SBV Law

states that the Governor is

responsible to the National

Assembly and the Prime

Minister.

Modality of

appointment

of members of

the

government

body

The Governor is the

Chairman; Deputy

Governors and Directors of

the Board are nominated by

the government.

The Chairperson of the

Board is the RMA's

Governor who is appointed

by the King on the

recommendation of the

Prime Minister. The

Deputy Governors are

appointed by the Board

from within the RMA,

while the remaining four

members are appointed by

the government.

The Governor and the

Deputy Governor are

appointed by a royal decree

on the recommendation of

the Royal Government. The

other five members are

appointed by a sub-decree,

and are selected from a list

prepared by the Governor.

Members of the Board of

Directors of theBoL are

appointed or removed from

office by the Prime

Minister based on the

proposal of the Governor of

the BoL.

The Governor and Deputy

Governor are appointed by

the President with the

consultation of the

Parliament, the other

members are appointed by

the President with the


Governor.

The Governor is appointed

by the Parliament at the

submission of the Speaker

of the Parliament. The


appointed by the

Parliament, at the

submission of the Governor

of BOM (Article 26).


by the President and

ratified by the Parliament.

The Deputy Governor is

appointed by the President.

De facto, as mentioned

above, CBM operates as a

part of the Ministry of

Finance and its officials at

this stage can be considered

responsible to MOFR.

Plans are to grant the CBM

more operational autonomy

after the adoption of the

new CBM law.

All members are appointed

by the Government of

Nepal (the Council of

Ministers) (Articles 14, 15,

16). The appointment of

the Governor is based on

the recommendation of the

recommendation committee

headed by the finance

minister (Article 15).


based on the


Governor (Article 16).


by the head of state (Prime

Minister) and the Governor

appoints Deputy Governors

(up to two persons) after

consultation with the

Minister for Treasury. The

membership of the Board

comprises (i) the Governor,

(ii) Deputy Governor, (iii)

up to three persons

appointed by the head of

state, (iv) the head of the

Council of Churches, (v)

the president of the

Chamber of Commerce,

(vi) the president of the

Trade Union Congress,

(vii) the president of the

Institute of Accounts, and

(viii) the chairman of the

Securities Commission.

The Governor, Deputy

Governor, and non-

executive members are

appointed by the Prime

Minister, on a non-binding


Governing Board.

The SBV Governor is

appointed by the Prime

Minister. The Prime

Minister also appoints the

Deputy Governors.



Term of

appointment

The government sets

renewable four-year tenure

for the position of

Governor, subject to age

not older than 65 years.

The same tenure and age

limit has been made

applicable for Deputy

Governors. A government-

appointed search committee

nominates the Deputy

Governors.

All members are appointed

for five years which can be

extended for one more term

of five years. For the first

appointment after the

enactment of the RMA Act

2010, the first terms of the

two Deputy Governors

(DG) are staggered at five

years for one DG and four

years for the other DG.

Similarly, the first terms of

the other four members are

also staggered at five, four,

three, and two years.

Members of the Board of

Directors are appointed for

a period of four years and

shall be eligible for

reappointment. Other than

for the Governor, Deputy

Governor, and the National

Bank staff representative,

two of the board members,

chosen by lot, shall serve

for two years, from the date

of appointment of the first

board.

The BoL law stipulates that

the Board of Governors

shall have terms of office

for five years. Members of

the Board of Directors may

be reappointed.


for a term of seven years.

The Deputy Governor is

appointed for a term of six

years. The other five

members are appointed to a

term of five years.

The Governor and two


appointed for a period of

six years.

The term of the Governor

and the Deputy Governor is

five years. The term of

other members is four years

with possibility of

reappointment for another

term.

The term of the Governor,

Deputy Governors, and

Directors shall be five years

(Article 18).

The terms for the

Governor, the Deputy

Governor, and the

appointed members of the

Board are five to seven

years, five years, and three

years, respectively. They

may be reappointed, but the

maximum term for the

Governor is 14 years.

The members of the

Governing Board are

appointed for a period of

six years, renewable once.

The term of appointment of

the Governor and Deputy

Governors is not specified

in the SBV Law.

Dismissal Government sets renewable

three years term of office

for Directors who are not

Government officials, with

the Directors nominated

from Government officials

to hold office at the

pleasure of Government.

Government may remove a

Director from office,

without mentioning the

criteria for removal.

The Governor may be

removed by the King on the


Prime Minister, while the

other members may be

removed from office by the

government. However,

these removals shall be

effected only upon the

findings of a committee

consituted to determine

permanent incapacity or

incapability on the part of

the members.

The Governor and the

Deputy Governor are

dismissed by a royal decree

while the other five

members are dismissed by

a sub decree.

The BoL law (Article 13)

stipulates that members of

the Board of Directors shall

cease from terms of office

in the case of terms of

office is expired, death,

resignation or removal from

office. The resignation shall

be approved by the Prime

Minister. In the case any

member of the Board of

directors dies, resigns or is

removed from office which

will cause the difficulty for

the administration of the

Bank, the Prime Minister

shall immediately appoint

new person to ensure the

continuity of the duty for

the remaining period of the

Board.

Grounds for dismissal or

removal is not explicitly

stated in the current MMA

Act.

The governor and the

deputy governors can be

dismisssed by the

parliament.

The member can be

dismissed if he or she (a)

infringes the terms of

appointment; (b) convicted

of offence under existing

laws; ( c) submits a

resignation and obtains the

permission; (d) judged

incapable of performing

duty by the authority

concerned; (e) failed to

attend the Board for three

consecutive months without

leave.

The Government of Nepal

(the councils of ministers)

can remove the members of

BoD under some special

circumstances (Article 22).

The Governor may be

removed from office by the

Head of State. And the

Board may make a

recommendation to remove

the Governor to the

Minister, when the

Governor is guilty of

conduct prejudicial to the

performance of his duties.

The Governor may remove

the Deputy Governor from

office. The other members

of the Board may be

removed under legal

grounds.

The Governor may only be

removed in cases provided

by law, by order of the

Prime Minister, after

consultation with the

Governing Board. Other

Board members can only be

dismissed by order of the

Prime minister on the


board.

NA



Economic

Autonomy

Formulation

and execution

of monetary

policy

The BB’s Board of

Directors is responsible for

formulating and conducting

monetary policies.There is

a Council for coordination

of fiscal, monetary, and

exchange rate policies

headed by the Finance

Minister. The BB’s

Monetary Policy

Committee (MPC) ensures

that the macroeconomic

framework as coordinated

by the coordination council

is reflected in the policies

of the BB.

The RMA's Board of


the policy and corporate

governance of the RMA.

The NBCs Board of


formulating and conducting

monetary, exchange rate,

and credit policies.

The BoL does not have the

autonomy to formulate

monetary policy. Article 5

of the BoL law instructs the

BoL to manage and adjust

the money supply in

circulation in accordance

with the approved plan of

the government. The law

also stipulates that the BoL

shall report and propose

opinions on the economic,

monetary, and banking

situations to the

government regularly.

Thus, monetary policy is

formulated by the

government. Following

determination and approval

by the government, the BoL

implements monetary

policy.

Under the current MMA

Act, the Board of Directors

is responsible for

determining the monetary

policy of the Authority.

The BOM shall formulate

and implement state

monetary policy guidelines

(Article 10). The Board of

Directors advises and helps

the Governor to make

decisions. The monetary

policy guidelines should be

approved by the

parliament.

The Monetary Policy

Committee of the Central

Bank is responsible for the

formulation of monetary

policy and the conduct of

monetary policy operations.

The Committee consists of

the Deputy Governor as

Chairman and no fewer

than five but no more than

nine other members.

NRB is responsible for

formulating and

implementing necessary

monetary policies to

maintain price stability

(Article 5 (b), Article 44),

and the Board of Directors

shall frame monetary and

foreign exchange policies

(Article 29(a)).

The Governor is

responsible for formulating

and implementing monetary

policy and for the

regulation of the financial

system.

CBTL is responsible for

defining and implementing

monetary policy.

The SBV is a ministerial-

level agency of the

government with

constrained autonomy to

formulate and execute

monetary policy. The

Vietnam Constitution

stipulates that the National

Assembly is responsible for

deciding on such policies,

and that the government,

comprising the Prime

Minister and other

ministers and members, is

responsible for

implementing these

policies. Accordingly, the

SBV Law provides that (1)

the SBV Governor is a

cabinet member, (2) the

National Assembly decides

on annual inflation rate

targets, and (3) both the

Prime Minister and the

SBV Governor can

determine “the use of tools

and measures” for national

monetary policy.

Central bank

lending to the

government

BB makes advances to the

government, repayable in

cash within 90 days from

the date of advance. As

decided by the Cash and

Debt Management

Committee (CDMC),

advances up to taka 20

billion, termed Ways and

Means advances, are

charged interest at BB's

prevailing reverse repo

interest rate. Debit balances

beyond this amount are

termed overdrafts;

"current" overdrafts arising

in the fiscal year are

charged interest at a rate 1

percent higher than the

prevailing reverse repo

interest rate, while the

rollovers of accretion of

past debt stock ("block"

overdraft) are charged

interest at the prevailing

yield rate on 90-day

Treasury bills.

The RMA makes short-

term advances to the

government through the

Ways and Means Account

repayable within three

months of the close of the

financial year, currently at

an interest of 1 percent

above the last Treasury bill

rate. The amount cannot

exceed 10 percent of the

annual average of the

government's published

ordinary revenues for the

preceding two years.

The Central Bank shall

assist in the debt

management of the Royal

Government or public

entities by conducting

securities operations,

including advising on the

timing of

securities issues and

promoting the development

of money and capital

markets. The Central Bank

may temporarily extend

credit to the National

Treasury at the refinancing

rate and a maturity not

exceeding three months.

Although there is no clear

stipulation in the BoL law,

the BoL lends directly to

local governments.

Under the current MMA

Act, MMA can grant

temporary advances to the

government. Further, MMA

is allowed to buy, sell,

invest, or deal in treasury

bills and other securities

issued or guaranteed by the

government.

BOM may grant temporary

credit to finance the

temporary imbalance

between the budget revenue

and expenditure to be

payable by the end of the

fiscal year on the basis of a

contract. The temporary

credits outstanding shall

not exceed 10 percent of

average domestic budget

revenues collected in the

preceding three years. If

BOM has purchased

securities issued by the

government, the balance

will not be included in the

total amount of the

temporary credits

outstanding (Article 18).

The Central Bank Law

indicates that the CBM acts

as an advisor and agent of

the government for the

issuance of government

securities. In practice CBM

provides credit to the

government according to

the government needs,

including through

monetization.

NRB shall not provide any

type of financial assistance

to the Government of Nepal

except for the following:

(1) NRB may extend credit

to the government on a

condition to repay within

180 days; (2) the amount of

overdraft provided by NRB

shall not be more than 5

percent of the revenue

income of the governement

in the preceding fiscal year;

and (3) the total amount of

debt bond purchased by

NRB shall not be more than

10 percent of the revenue

income of the proceeding

fiscal year (Article 75).

The BPNG may grant

temporary advances to the

government at prevailing

interest rates. However, the

total amount of advance

shall not exceed a fixed

amount and it shall be

repaid to the Bank within

six months. The advances

shall not be granted to fill a

fiscal deficit.

CBTL shall not grant any

direct or indirect credit to

the government, with the

exception of intra-day

credits to secure the

functioning of the payment

system.

The SBV Law stipulates

the following: "The State

Bank shall, upon the Prime

Minister’s approval,

provide advances to the

central budget for the

purpose of dealing with

temporary deficits of the

State Budget. Such

advances shall be repaid

within the budget year in

which they are made,

except as otherwise decided

by the Standing Committee

of the National Assembly."



Central bank

role in public

debt policy

Government fiscal

operations are conducted

through the auction of

Treasury bills and bonds.

The quantities and timing

of the auctions are

announced in advance in

the auction calendars

approved by the

government's CDMC,

chaired by the Secretary of

the Finance Division, where

BB has its representative.

BB is responsible for

conducting the auction of

bills and bonds.


participate in the

management of both

domestic and foreign public

debt, including the issue of

guarantees in favor of

creditors.

N/A The current MMA Act

allows MMA to act as the

fiscal agency of the

government in its dealing

with International financial

institutions and to

undertake other financial

work for the government.

Under this Act, at present

MMA is the issuing and

paying agent of government

securities.

N/A The central bank provides

government credit

according to its needs as

indicated above. The role of

the CBM in providing

government advice on debt

management can be

improved.


shall consult with NRB on

domestic debt, including

overdrafts (Article 69 (3)),

and on loans from the

external sector (Article 70).

The BPNG issues Treasury

bills as the agent of the

government.

NA (no public debt has

been contracted).

NA

Lender-of-last-

resort

provisions

(LOLR)

BB plays its role as lender

of last resort through repo

under specific conditions,

and rediscounting window

facilities.

The RMA can rediscount

government securities to

financial institutions and it

can also provide 90-day

emergency loans under the

RMA Short Term Liquidity

Adjustment Window.

As an LOLR, the Central

Bank can offer credit to

commercial banks in riels

only. However, as the

economy is highly

dollarized, this role of

LOLR is greatly

constrained. In the case of a

banking crisis, the only

policy instrument available

for the Central Bank is the

use of international

reserves to lend to the

commercial banks, which is

not sustainable if the crisis

extends over a long period.

Article 4 of the BoL Law

stipulates that the BoL

shall be the final lender to

commercial banks and

financial institutions with

the objective to implement

monetary policy.

MMA is also allowed to

make loans and advances to

banks and other financial

institutions in Maldives for

a period not exceeding 90

days.

BOM may extend credit to

banks as a lender of last

resort if BOM considers

that the bank faces a

liquidity problem for a

period no longer than three

months and the bank is able

to repay the loan by

resolving its liquidity

problem (Article 13).

In the interest of averting or

reducing risk to financial

stability the CBM can (a)

provide financial assistance

to any financial institutions,

and (b) enter an

arrangement with other

central banks to provide

liquidity assistance to

subsidiaries or branches of

Myanmar financial

institutions abroad.

NRB may provide any type

of credit to a commercial

bank and financial

institution for a maximum

period of one year in cases

where the Government of

Nepal has deemed it

appropriate to provide a

loan in extraordinary

circumstances where NRB

has to act as a lender of last

resort (Article 49).

The BPNG can make loans

to banks and other financial

institutions when the Bank

considers it is necessary to

do so to safeguard

monetary stability or it is

desirable to promote the

smooth operation of the

payment system and to

maintain the financial

system.

In exceptional

circumstances, CBTL may

act as LOLR for a

registered bank. The

support may be provided

by granting financial

assistance to the registered

bank at a higher interest

rate than the current market

rate.

The SBV may extend credit

to banks as a lender of last

resort. Article 24 of the

SBV Law stipulates that

the SBV shall grant short-

term loans to credit

institutions.

Financial

Autonomy

Central bank’s

capital

integrity

There is no legal provision

requiring the government to

compensate central bank

losses.

The government shall issue

to the RMA marketable

securities to the extent of

the loss (if the loss cannot

be set off against credit

balances in the Reserve

Revaluation Account, if

any; or offset with realized

profits from the year's

operations; or met out of

the General Reserves).

Whenever the value of the

National Bank's assets on

its balance sheet falls below

the sum of its liabilities the

Royal Government shall,

within 60 days of

publication of such balance

sheet, transfer to the

Central Bank, its

government securities to

remedy the deficiency. The

securities shall be

negotiable and shall bear

interest at the refinancing

rate.

NA Under the MMA Act, the

government is required to

compensate MMA if it

makes a net loss exceeding

the General Reserve.

If liabilities of BOM

exceed its assets, the

parliament will make a

decision on compensating

for the gap by issuing

treasury bonds (Article 38).

Currently the Central Bank

is not remunerated for

losses or for services

provided as a government

agent.


shall bear the losses that

cannot be adjusted after

making allocations to the

general reserve fund and

the revaluation fund

(Article 42).

The net profit of BPNG

shall be paid to the

Consolidated Revenue

Fund after accumulating

provisions in the Reserve

Fund of the BPNG. When

the BPNG incurs a loss

beyond the capacity of the

Reserve Fund, the Minister

may transfer funds to the

BPNG from the

Consolidated Reserve Fund

of the government.

The capital of CBTL is

US$ 20 million. This

capital may be increased on

the recommendation of the

Governing Board and

approved by the

government. Profit

distribution to the

government is tightly

controlled.

Article 42 of the SBV Law

stipulates the following:

"The legal capital of the

State Bank shall be

allocated from the State

Budget. The level of the

State Bank’s legal capital

shall be determined by the

Prime Minister."



Central bank’s

budget

approval

The budget of the BB is

approved by its Board of

Directors and then by the

government auditor.

The RMA's budget is

approved by its Board.

NBC's annual budget is

approved by the Board of

the Central Bank and

submitted for information

to the Royal Government

and the National Assembly.

NA MMA's budget is

approved by its Board of

Directors.


discusses and approves

budget estimates for the

next fiscal year before the

15th day of December each

year.

The Ministry of Finance

controls the budget of the

Central Bank.


shall approve the estimated

budget of incomes and

expenditures. Such budget

shall be sent to the

government for information

(Article 43).

The Board approves the

budget of the BPNG.

CBTL prepares its annual

budget to be approved by

the Governing Board

before the commencement

of each financial year.

Article 43 of the SBV Law

stipulates that the State

Bank shall be conducted as

prescribed by the State

Budget Law. The Prime

Minister shall determine the

content of financial

collection and expenditure

in line with specific

professional activities of

the State Bank.



Accountability

relative to its

policy

objective

The BB publishes its

annual report and bi-yearly

monetary policy statements

(MPS) for dissemination of

monetary policies pursued

by BB.

The RMA must submit its

annual report to the

government within four

months of the close of its

financial year, and publish

the report on its website.


publish on a regular basis

its monetary policy

objectives (money-credit-

exchange-interest rates).

The BoL publishes annual

reports that cover

performance of monetary

aggregates and statistics.

Information behind

decisions taken by the BoL

is generally not published.

MMA is required to

publish the balance sheet

for the month at the end of

each month. It is also

required to submit to the

President, at the end of

each year, a report on its

operations during the year,

accompanied by audited

financial statements. This

report shall be published

after receiving the approval

of the President. MMA is

also required to submit to

the Parliament its annual

financial statements.

The monetary policy

guidelines (Article 10),

published annually, state

that the aim of monetary

policy is to maintain low

and stable inflation over the

medium term. The

guidelines can be

downloaded from the BOM

website.

According to the CBM law,

the CBM shall submit its

annual report to the

government. The report is

not published.

NRB shall publish the

report on monetary policy

each year including (1)

comprehensive review and

evaluation of the monetary

policy introduced by NRB

in the preceding year; and

(2) justification and

analysis of the monetary

policy that NRB is going to

introduce in the following

year (Article 94).

The BPNG shall issue a

policy statement every six

months detailing actions

taken on monetary policy.

CBTL informs, twice per

year and whenever

necessary, the National

Parliament and the public

of its monetary policy and

the achievement of its

objectives.

Though the modalities of

publishing the annual

reports are not specified in

the SBV Law; the SBV

publishes its annual reports

on its website.

Disclosure of

a monetary

policy or

inflation

report

MPS presents general

information on BB's

outlook on real sector and

monetary developments

over the immediate future

and the monetary policy

stance it will pursue,

outlining a monetary

program based on its

assessment of the

developments over the

preceding quarters.

The RMA must issue its

monetary policy statement

setting out the monetary

policy for the following

year, at least once a year.

At the end of each half-year

period the Central Bank

shall deliver an assessment

of the economic and

financial condition of the

Kingdom and a description

of the monetary and

exchange policies that

the Central Bank proposes

to follow during the next

semester and for such

longer period of time as the

Central Bank may decide.

A monetary policy or

inflation report is not

publised.

The MMA does not publish

the monetary policy

statement but the MMA

releases periodical

publications (monthly,

quarterly, and annually)

which cover developments

in the real , monetary,

financial, and external

sectors.

BOM shall publicize

information on changes on

instruments of monetary

policy implementation in

due course, and on the

money, credit, and financial

markets on a quarterly

basis (Article 34).

Currently there is no public

disclosure of monetary

policy.

NRB shall publish the

report on monetary policy

each year including (1)

comprehensive review and

evaluation of the monetary

policy introduced by NRB

in the preceding year; and

(2) justification and

analysis of the monetary

policy that NRB is going to

introduce in the following

year (Article 94).

The policy statement shall

contain details of action

taken for monetary policy.

CBTL submits a report of

its operations and activities

within four months after the

close of the financial year.

The SBV is required to

submit semiannual and

annual reports on monetary

and banking developments

to the government.

Disclosure of

income

statements and

certification

The BB discloses its

detailed balance sheet and

profit and loss accounts

certified by the external

auditor in its Annual

Report. Its financial

statement is as defined by

International Financial

Reporting Standards, and is

audited by two independent

certified firms appointed by

the Ministry of Finance.

The audited accounts of the

RMA are published in its

annual report.

The NBC should provide a

monthly summary

statement. All financial

records of the Central Bank

shall be disclosed within

six months after the end of

each financial year. The

records shall be verified by

the Board of the National

Bank of Cambodia and the

National Audit Authority.

Income statements of the

BoL are not published.

MMA publishes audited

annual financial statements

each year with full

disclosure of income

statements and balance

sheet.

BOM continues to publish

its annual report with sets

of audited financial

statements.

The CBM laws indicate

that its annual report

should have a balance sheet

and a profit and loss

statement certified by the

Union Auditor General .

The report is not published.

NRB shall prepare an

annual report for each fiscal

year including the balance

sheet, profit and loss

accounts, and other relevant

information (Article 91).

The NRB's accounts should

be audited (Article 92), and

the annual report shall be

submitted to the parliament

(Article 93). Furthermore,

NRB shall publish its

monthly balance sheet

within 15 days from the

date of completion for each

month (Article 93).

The BPNG shall deliver an

audited financial statement

to the Minister for Treasury

within six months after the

end of the financial year.

CBTL publishes on its

website, within 15 working

days after the end of each

month, a pro forma balance

sheet, and deliver copies to

the Prime Minister and the

Ggvernment member

responsible for finance. Its

financial statements are

audited at least once a year

by independent external

auditors.

The SBV is required to

have its annual financial

statements audited and

submitted to the

government. However,

these are not published and

there is no requirement for

the SBV to publish them.

Accountability and Transparency



Disclosure of

policy

decisions

The BB publishes the

decisions on monetary

policy from time to time in

the form of notifications,

circulars, circular letters,

reports etc. in printed form

as well as in electronic form

on its website.

The RMA publishes all

monetary policy actions

taken in its Monetary

Policy Statement.

The NBC should publish

the Board of Director’s


policy.

Not published. There is no requirement

under the MMA Act to

publish its policy decisions.

BOM continues to publish


policy (e.g., changes in

policy rate or reserve

requirement).

There is no disclosure of

monetary policy by the

CBM.

Minutes of the Board of

Directors are are not

disclosed. Policy decisions

made by the Board are

disclosed in a monetary

policy document and its

review document (monetary

policy is reviewed

semiannually), and other

decisions relating to policy

made by the Board are

disclosed through circulars

from concerned

departments.

The policy statement shall

contain details of action

taken for monetary policy.

CBTL's annual report

includes a review and

assessment of its policies

pursued during the previous

year and a description and

explanation of the policies

that the Bank will follow

during the next year.

The SBV issues press

releases that communicate

changes in monetary policy

and attempt to provide a

rationale.

Monetary policy

regime

Monetary aggregate (M2)

targeting.

Exchange rate targeting. Exchange rate anchor. The monetary policy

framework is a mixed

regime of monetary

targeting and an exchange

rate anchor.

Exchange rate targeting is

used as the main anchor of

monetary policy. The main

aim of the MMA's

monetary policy is to

achieve price stability by

maintaining an adequate

level of external reserves

and to achieve exchange

rate stability.

Monetary aggregate target.

The BOM pursues M2 as

an intermediate target and

reserve money as an

operational target in the

context of an IMF-

supported program. The

program was completed

October 1, 2010.

Exchange rate anchor

with monetary aggregate

targeting.

Exchange rate anchor. The BPNG does not have

an explicit target. However,

it has a reference rate for

inflation rate even though it

has not yet adopted an

inflation target regime.

Timor-Leste uses U.S.

dollars and does not have

its own monetary policy.

A mixed regime with

elements of both monetary

and exchange rate

targeting.

Exchange rate

system

Effective from May 31,

2003, Bangladesh floated

its exchange rate and

followed a fully market-

based floating exchange

rate.The exchange rate is

primarily determined on the

basis of demand and supply

of the respective currencies.

To avoid unusual volatility

in the exchange rate BB

may purchase and sell U.S.

dollars as and when it

deems necessary to

maintain stability in the

foreign exchange market.

Conventional peg to the

Indian rupee at parity.

Stabilized arrangement.

The de jure exchange rate

arrangement is a managed

float. Given the high degree

of financial dollarization,

the National Bank of

Cambodia (NBC)

intervenes in the foreign

exchange market to

accommodate demand for

riels and maintain exchange

rate stability. There were

two marginal adjustments

in the path of the riel–U.S.

dollar exchange rate in

2011, but the riel remained

stable. Accordingly, the de

facto exchange rate

arrangement is classified as

a stabilized arrangement.

Stabilized arrangement.


arrangement is managed

floating. There is an

implicit objective of

stabilizing the value of the

kip vis-à-vis the U.S. dollar

and the Thai baht to meet

inflation objectives and to

support efforts to

dedollarize.

The exchange rate of the

Maldives was changed

from a hard peg to a

horizontal band on April

11, 2011, after 10 years.

The rufiyaa was allowed to

fluctuate within a band of

20 percent in either

direction around a central

parity of MVR 12.85 per

U.S dollar, i.e., the rufiyaa

was allowed to fluctuate

between MVR 10.28 and

MVR 15.42, with a width

of MVR 5.14.


arrangement is floating.

The BOM reserves the

right to intervene in the

foreign exchange market

using the U.S. dollar in

most cases and the Chinese

yuan occasionally as the

principal intervention

currency. The BOM

intervenes through the

auction to smooth sharp

exchange rate volatility.

The BOM publishes on its

website the amount of bids,

the cutoff rate, and the

amount of purchase/sale for

each auction.

According to the IMF's

2011 Annual Report on

Exchange Arrangements

and Exchange Restrictions

(AREAER) the de jure

exchange rate arrangement

has been reclassified to a

managed float from a

conventional peg to the

SDR at K 8.50847 per

SDR, effective April 2,

2012.


arrangement is a

conventional peg vis-à-vis

the Indian rupee at the rate

of Nrs 1.6 per Indian rupee

since February 1993. The

NRB Act authorizes the

NRB to establish the

Nepali exchange rate

arrangement (Article 5 (1)

(d)).

PNG adopted a floating

exchange rate system in

1994. Authority to

administer exchange

control is vested in the

BPNG. The Bank issues

instructions, directions, and

requirements to the

authorized dealers in

respect of classes of

transactions. Capital

account transactions can be

mostly carried without

permission from the

authorities.

Timor-Leste is fully but

unilaterally dollarized.

The SBV announces a daily

official US$/VND

exchange rate, which has

remained unchanged since

early 2012. Banks are

required to trade within a

transaction band of ±1

percent around the daily

official rate in the interbank

market.

Documents

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