Infinite Menus, Copyright 2006, OpenCube Inc. All Rights Reserved.
     Foreign Exchange Reference Rates
Euro Foreign Exchange Reference Rates as at: 23.04.2014.
All currencies quoted against the euro
(base currency)
   Note: The quoted rates shall apply
   as of 00:00h, 24.04.2014.
    Download
    FX Reference Rates Archive
    FX Reference Rates - Calendar
Get Adobe Flash player

Policy of the Central Bank of Montenegro for 2006

Pursuant to Article 17, paragraph 1, point 1 of the Law on the Central Bank (»Official Gazette of Montenegro« No. 52/00 and 47/01), at its meeting held on December 12, 2005, the Council of the Central Bank of Montenegro adopted:


 CENTRAL BANK POLICY FOR 2006
 

Starting from achievements in the development of financial stability in the banking system and the application of international standards, the Central Bank of Montenegro (CBM) will carry out the following objectives during 2006: 

1. improve institutional framework that will ensure more efficient implementation of Basel II principles and standards, better supervision methods and techniques and faster development of a database to serve the stress testing of the system, development of financial discipline and preventive protection of bank depositors;

2. continuously monitor, analyze and study the condition of the financial and general economic system, in the function of proposing effective measures for maintaining financial stability and giving recommendations for fostering economic growth;

3. maintain an efficient domestic payment system and support its development;

4. maintain legal reserve policy aimed at providing the necessary liquidity of the system and controlling credit expansion;

5. upgrade the quality of existing services, establish and perform new services as the banker, advisor and fiscal representative of bodies and agencies of the Republic of Montenegro;

6. improve cooperation with international financial institutions, international financial organizations and central banks;

7. improve the staffing and technical capabilities of the CBM on an ongoing basis;

8. perform analysis of public opinion and raise public awareness of the CBM's activities.

1. In the function of ensuring more efficient implementation of Basel II principles and standards, improving supervision methods and techniques, as well as developing a database to serve the stress testing of the system, development of financial discipline and preventive protection of bank depositors, the CBM will work on:  

  • a) the improvement of the institutional regulatory framework by adopting a new Law on Banks and appropriate enabling regulations in order to create the legal basis for expanding the banking market, improving and developing provisions from the current law and creating a legal framework for gradual transition to Basel II;
  • b) further improvement of supervision methods and techniques, focusing on ongoing bank supervision, with additional strengthening of off-site examination;
  • c) the development of a database to serve stress testing of the system and create the possibilities for the implementation of centralized rating monitoring model, for a faster transition to Basel II models;
  • d) further improvement of financial discipline through the strengthening of risk management and market discipline, based on better exchange of information with banks, and through public disclosure of information about their performance;
  • e) efficient resolution of issues related to non-solid banks;
  • f) bank licensing and issuance of permissions and approvals, in the function of strengthening corporate culture, competition and preventive protection of depositors, focusing on businesses reputation and quality of potential bank shareholders;
  • g) increasing the level of public awareness of the importance of the banking industry and the character of safe banking practices and standards;
  • h) encouraging competition in the banking industry and improving management structures. 

 

2. In order to continuously monitor, analyze and study the condition of the financial and general economic system, in the function of proposing effective measures for maintaining financial stability and giving recommendations for fostering economic growth, the CBM will: 

  • a) monitor macroeconomic developments in the Republic, collect relevant statistical data and perform regular economic analyses in the monetary, financial, fiscal and real spheres as well as in the domain of international economic relations;
  • b) particularly analyze the possibilities of maintaining macroeconomic stability, fostering economic development, reducing the deficit of balance of payments current account, reducing interest rates, decreasing all risks, maintaining low budgetary deficit and low inflation rate, fulfilling the Maastricht criteria and creating a stimulating business environment;
  • c) pursuant to obligations under the Law on Current and Capital Foreign Transactions, monitor trends in the balance of payment of the Republic and propose corrective actions as needed;
  • d) monitor and analyze international experience, with a view to reviewing the possibilities for implementation of efficient economic and monetary policy measures, especially from Southeast European countries, the countries that successfully finished the process of joining the EU, and dollarized countries;
  • e) by using a macroeconomic model for Montenegro and preparing studies, analyze the impact of existing instruments of monetary and economic policy, as well as the possibilities for the development and application of new instruments in the euroization circumstances;
  • f) participate in the preparation of new and amendment of existing legal provisions in order to improve the business environment and create incentives for attracting new investments;
  • g) work toward improving the existing and introducing new reports, primarily the CBM Bulletin and Financial Stability Report;
  • h) organize data collection for the purposes of creating and publishing monetary and balance of payment statistics;
  • i) review and identify deficiencies in existing statistical, methodological and institutional basis for leading economic policy and give recommendations for overcoming such deficiencies;
  • j) encourage research work in the area of monetary policy and theory. 

 

3. With a view to maintaining efficient domestic payment system and supporting its further development, the CBM will: 

  • a) complement the regulatory framework for the new payment system by preparing the Law on Domestic Payment System and by amending the appropriate enabling regulations in conformity to the Law;
  • b) develop stability and efficiency of the inter-bank payment system, in order to achieve a higher degree of safety in its operation and reduce operational risk;
  • c) work on the development and implementation of a new information system that will facilitate enforced collection, in order to achieve further functional improvements and full automation, which would result in the maximum efficiency in enforced collection efforts;
  • d) continue the efficient implementation of domestic payment services for CBM clients.  

 

4. In order to monitor and control liquidity of the banking system and manage foreign exchange reserves of the Republic, the CBM will: 

  • a) further improve the regulatory framework;
  • b) maintain an active legal reserve policy, continuously review the existing one and modify the legal reserve requirement as needed;
  • c) manage the monetary reserves of the Republic, in the country and abroad, observing risk minimization and yield maximization principles;
  • d) improve the efficiency of foreign payment operations;
  • e) provide the necessary quantity and denominations of banknotes and coins in euros for the needs of banks and financial institutions;
  • f) provide better management of liquidity surpluses in the Republic, by encouraging the development of the inter-bank money market and operations on the open market.  

 

5. In order to develop the quality of existing services, and establish and perform new services as the banker, advisor and fiscal representative of bodies and agencies of the Republic of Montenegro, the CBM will: 

  • a) develop efficient monitoring of all budget inflows and outflows that are recorded as deposits with the CBM;
  • b) monitor inflow and use of financial resources extended to the Republic through credits and grants, as well as other funds from abroad;
  • c) carry out and improve the auction procedure for T-bills and bonds issued by the Government of Montenegro;
  • d) propose measures and activities that will contribute to the reduction of the budget deficit and the level of domestic and external debt and public debt;
  • e)ensure efficient foreign payment operations and inter-bank payment operations in the country for the needs of bodies and agencies of the Republic.  

 

6. With a view to improving cooperation with international financial institutions, international financial organizations and central banks, the CBM will: 

  • a) further improve cooperation with the World Bank related to the CBM's function as the fiscal agent of Serbia and Montenegro in the World Bank, by means of creating conditions for independent performance of financial transactions concerning debt servicing under the World Bank loans to the Republic of Montenegro, as well as by means of implementation of reform activities and the fulfillment of obligations defined as a condition for receiving financial assistance from these institutions and direct participation in the work of its executive bodies;
  • b) further improve cooperation with the International Monetary Fund, by carrying out the obligations, pursuant to the CBM's powers and authorities, which are the precondition for using the financial support of the Fund, then by preparing views and opinions about future programs of cooperation with IMF, as well as by direct participation in the work of its executive bodies;
  • c) continue cooperation with the European Commission and initiate new forms of cooperation with EU bodies, particularly the European Central Bank, and take an active part in the process of association with the EU, in accordance with the CBM's responsibilities;
  • d) continue to foster cooperation with international organizations and other organizations of interest to the CBM and develop existing cooperation through direct contacts, collection of information and monitoring of activities of those organizations, by participating in the work of working bodies and assemblies, and by organizing international conferences;
  • e) continue to improve already established cooperation and initiate future cooperation with other central banks through the collection of information, monitoring and improvement of implementation of agreements and proposing new forms of cooperation;
  • f) take part in negotiations with the National Bank of Serbia related to the distribution of assets and liabilities, the division of financial assets and liabilities between Montenegro and Serbia, the distribution of public debt and the establishment of payment operations between Montenegro and Serbia, in accordance with the Institutional Charter of the State Union of S&M and the Law on Implementation of the Constitutional Charter of the State Union of S&M;
  • g) carry out activities on the improvement of existing and the establishment of new correspondent relationships with foreign banks and banking institutions;
  • h) undertake all other activities that will lead to further recognition of the CBM internationally. 

 

7. To improve staffing and technical capabilities of the CBM on an ongoing basis, the CBM will: 

  • a) work on further strengthening of staffing capacities - by providing training of employees in the country and abroad, promoting the performance evaluation system in order to develop motivation and provide rewards for the best performers, and by introducing or harmonizing regulations and practices in this domain with the regulations and practices of the EU - through participation in appropriate international projects;
  • b) improve the existing information system by transition to a new technological platform, define IS architecture of the CBM and make efforts to improve the efficiency and security of the existing IS. 

8. For the purpose of performing an analysis of public opinion and raising public awareness of the CBM's activities, the CBM will: 

  • a) work on further improvement of communication, both internally and externally, with the public – partners, citizens, local and foreign media and interest groups;
  • b) keep the public regularly informed of the CBM's activities through the media;
  • c) educate the public about the CBM's role and raise public perception of the significance of financial stability and fiscal discipline;
  • d) continuously improve the CBM's website;
  • e) publish bank financial statements and tariffs, in cooperation with the Bankers Association.

 

   

COUNCIL OF THE CENTRAL BANK OF MONTENEGRO        

   

Ref. 0101-377/16-3-2005               PRESIDENT OF THE COUNCIL
Podgorica, December 12, 2005                   Ljubiša Krgović               

 

Copyright 2007 © Central bank of Montenegro
Created by Božo Cvetkovski