Issuance and Regulating are a Few Function of Central Bank

July 4th, 2010

The Central Bank has the sole power to issuance banknotes and coins. The banknotes and coins issued by the Central Bank are the only means of payment with power unlimited circulation and legal tender throughout the country.

Regulating the amount of money in circulation and credit. The Central Bank may open lines of credit, grant refinancing and discounting and re-discount negotiable documents in national or foreign currency, to the banking and financial companies. Fix the reserve rates that in proportion to their deposits and obligations, to maintain these entities and cooperatives of savings and credit; yield documents of its portfolio of placements or investment banks and financial and purchase of the same, documents of their portfolios of placements or investments and finally, to conduct open market operations.

Regulating the financial system and the capital market. The Central Bank is empowered to regulate the deposits of funds from the public by part of the banking, financial companies and savings and credit. Set the maximum interests who can pay the same entities on deposits. Dictate the rules and limitations to be subject banks and financial guarantees and collateral in foreign currency.

Set the relations between the lending and deposits of banking enterprises, financial companies and savings and credit; to regulate the functioning of the clearing and to allow the indexation systems make use in their credit operations of money in national currency the Banking companies, financial companies, savings and credit. In the credit operations of money in national currency that is not any part of these entities, you can agree freely any system of readjustment without the need for authorization of the Central Bank.