Fontier Asia: Monetary Policy Frameworks Main Provisions of Central Bank Legislation as of

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1 The Bank (BB) has as its main objectives to stabilize the domestic monetary value and external competitiveness of the taka to foster growth and development of the country's productive resources in the best national interest. The Royal Monetary Authority (RMA) Act of 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 '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 '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 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. The Bank of (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 (CBM) law indicates that the aim of the CBM is to preserve the value of the 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 ( 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 (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. Policy Mandate Central bank objective Political Autonomy The Central Bank of Timor- Although the State Bank of Leste (CBTL) has as its (SBV) law states objective to achieve and the objective for monetary maintain domestic price policy is stabilizing stability, to promote and currency value expressed maintain a stable and by the inflation target, competitive financial monetary policy has in system, and to support the practice been guided by general economic policies several other objectives, of the government. including promoting economic growth, containing inflation, stabilizing the exchange rate, and preserving financial stability.

2 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 The Governor is of seven members, the Governor, Secretary (Ministry of Finance), two Deputy Governors, and three Directors (Article 14). 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 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 Deputy Governors are appointed by the Parliament, at the submission of the Governor of BOM (Article 26). The Governor is appointed 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 (the Council of Ministers) (Articles 14, 15, 16). The appointment of the Governor is based on the recommendation committee headed by the finance minister (Article 15). Deputy Governors are based on the Governor (Article 16). The Governor is appointed 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 nonexecutive 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.

3 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 governmentappointed 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. The Governor is appointed 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 Deputy Governors are appointed for a period of six years. The term of the Governor The term of the Governor, The terms for the The members of the and the Deputy Governor is Deputy Governors, and Governor, the Deputy Governing Board are five years. The term of Directors shall be five years Governor, and the appointed for a period of other members is four years (Article 18). with possibility of reappointment for another term. 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. 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 (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 NA 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.

4 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 Directors is responsible for the policy and corporate governance of the RMA. The NBCs Board of Directors is responsible for 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 CBTL is responsible for responsible for formulating defining and implementing and implementing monetary monetary policy. policy and for the regulation of the financial system. The SBV is a ministeriallevel agency of the government with constrained autonomy to formulate and execute monetary policy. The 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. 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 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. 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 BB makes advances to the The RMA makes shortlending to the government, repayable in term advances to the cash within 90 days from government through the government The Central Bank shall assist in the debt management of the Royal the date of advance. As Ways and Means Account Government or public decided by the Cash and repayable within three entities by conducting Debt Management months of the close of the securities operations, Committee (CDMC), financial year, currently at including advising on the advances up to taka 20 an interest of 1 percent timing of billion, termed Ways and above the last Treasury bill securities issues and Means advances, are rate. The amount cannot promoting the development charged interest at BB's exceed 10 percent of the of money and capital prevailing reverse repo annual average of the markets. The Central Bank interest rate. Debit balances government's published may temporarily extend beyond this amount are ordinary revenues for the credit to the National termed overdrafts; preceding two years. Treasury at the refinancing "current" overdrafts arising rate and a maturity not in the fiscal year are exceeding three months. 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. 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.

5 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. Lender-of-last- BB plays its role as lender of last resort through repo resort under specific conditions, provisions and rediscounting window (LOLR) 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. 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). The current MMA Act N/A 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. 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. The Government of The BPNG issues Treasury NA (no public debt has shall consult with NRB on bills as the agent of the been contracted). domestic debt, including government. overdrafts (Article 69 (3)), and on loans from the external sector (Article 70). NA 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. MMA is also allowed to make loans and advances to banks and other financial institutions in 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 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 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 shortterm loans to credit institutions. 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. The Government of 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 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." 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. Financial Autonomy Central bank s There is no legal provision The government shall issue Whenever the value of the NA requiring the government to to the RMA marketable National Bank's assets on capital compensate central bank securities to the extent of its balance sheet falls below integrity losses. The Central Bank shall N/A participate in the management of both domestic and foreign public debt, including the issue of guarantees in favor of creditors. 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.

6 Central bank s The budget of the BB is approved by its Board of budget Directors and then by the approval government auditor. The RMA's budget is approved by its Board. NBC's annual budget is NA approved by the Board of the Central Bank and submitted for information to the Royal Government and the National Assembly. MMA's budget is approved by its Board of Directors. The Board of Directors The Ministry of Finance discusses and approves controls the budget of the budget estimates for the Central Bank. next fiscal year before the 15th day of December each year. The Board of Directors The Board approves the shall approve the estimated budget of the BPNG. budget of incomes and expenditures. Such budget shall be sent to the government for information (Article 43). 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.

7 Accountability and Transparency Accountability The BB publishes its The RMA must submit its The Central Bank shall The BoL publishes annual According to the CBM law, The BPNG shall issue a CBTL informs, twice per relative to its policy objective annual report and bi-yearly annual report to the monetary policy statements government within four (MPS) for dissemination of months of the close of its publish on a regular basis its monetary policy objectives (money-creditexchange-interest reports that cover performance of monetary aggregates and statistics. the CBM shall submit its annual report to the government. The report is policy statement every six months detailing actions taken on monetary policy. year and whenever necessary, the National Parliament and the public monetary policies pursued by BB. financial year, and publish the report on its website. rates). Information behind decisions taken by the BoL is generally not published. not published. of its monetary policy and the achievement of its objectives. 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. 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). 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 The SBV is required to its operations and activities submit semiannual and within four months after the annual reports on monetary close of the financial year. and banking developments to the government. Disclosure of The BB discloses its income statements and certification 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 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 CBTL publishes on its audited financial statement to the Minister for Treasury within six months after the end of the financial year. 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.

8 The RMA publishes all Disclosure of The BB publishes the decisions on monetary monetary policy actions policy policy from time to time in taken in its Monetary decisions the form of notifications, Policy Statement. circulars, circular letters, reports etc. in printed form as well as in electronic form on its website. Monetary policy Monetary aggregate (M2) regime targeting. Exchange rate system Exchange rate targeting. Effective from May 31, Conventional peg to the 2003, floated Indian rupee at parity. its exchange rate and followed a fully marketbased 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. The SBV issues press releases that communicate changes in monetary policy and attempt to provide a rationale. Not published. There is no requirement BOM continues to publish There is no disclosure of under the MMA Act to decisions on monetary monetary policy by the publish its policy decisions. policy (e.g., changes in CBM. policy rate or reserve requirement). 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. Exchange rate anchor Exchange rate anchor. The BOM pursues M2 as with monetary aggregate an intermediate target and targeting. reserve money as an operational target in the context of an IMFsupported program. The program was completed October 1, The BPNG does not have uses U.S. an explicit target. However, dollars and does not have it has a reference rate for its own monetary policy. inflation rate even though it has not yet adopted an inflation target regime. A mixed regime with elements of both monetary and exchange rate targeting. Stabilized arrangement. The de jure exchange rate arrangement is a managed float. Given the high degree of financial dollarization, the National Bank of (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. The de jure exchange rate 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 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 per U.S dollar, i.e., the rufiyaa was allowed to fluctuate between MVR and MVR 15.42, with a width of MVR The de jure exchange rate 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. PNG adopted a floating is fully but exchange rate system in unilaterally dollarized 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. The SBV announces a daily official US$/VND exchange rate, which has remained unchanged since early Banks are required to trade within a transaction band of ±1 percent around the daily official rate in the interbank market. 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 per SDR, effective April 2, Minutes of the Board of The policy statement shall Directors are are not contain details of action disclosed. Policy decisions taken for monetary policy. 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. 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 NBC should publish the Board of Director s decisions on monetary policy. The de jure exchange rate arrangement is a conventional peg vis-à-vis the Indian rupee at the rate of Nrs 1.6 per Indian rupee since February The NRB Act authorizes the NRB to establish the i exchange rate arrangement (Article 5 (1) (d)).