On 13 September 2011, the Banking and Payments Authority
of Timor-Leste ("BPA") was transformed into the Central
Bank of Timor-Leste under Parliamentary Law No 5/2011
("Organic Law of the Central Bank"). The
establishment of the Central Bank, which has broader powers than
its predecessor the BPA, further demonstrates that the State of
Timor-Leste (East Timor) is progressively putting in place its
financial and economic architecture.
The new Central Bank, which is an independent and autonomous
public entity, is managed by the Governor, who is supported by two
Deputy Governors, and a Board of Directors comprised of the
Governor, the two Deputy Governors and four non-executive
members. The Governor of the Central Bank is currently
Abraăo de Vasconselos.
Under the Organic Law of the Central Bank, the Central
Bank's primary objective is to achieve and maintain domestic
price stability. In addition, the Central Bank will also
promote and maintain a stable and competitive financial system
based on free market principles and support the general economic
policies of the Government of Timor-Leste.
To achieve its objectives, the Central Bank has, amongst others,
responsibility for the following functions:
To define and implement monetary policy;
To define and adopt the exchange rate system;
To conduct foreign exchange operations;
To hold and manage official foreign reserves;
To hold and manage the State's reserves of gold;
To issue and manage the currency of Timor-Leste;
To establish, promote and oversee sound and efficient payment
and securities settlement systems;
To regulate, license and supervise financial institutions such
as banks, non bank deposit taking institutions (eg micro-
financiers), insurance companies, insurance intermediaries and
currency exchange bureaus; and
To act as the fiscal agent of the State.
The Central Bank is also the operational manager of
Timor-Leste's sovereign wealth fund- known as the Petroleum
Fund- in accordance with the operational agreement it signed with
the Government of Timor- Leste on 25 June 2009. As at 31
October 2011 the Petroleum Fund had assets of just over US$9
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