CENTRAL BANK OF SEYCHELLES ACT, 2004

(Act 12 of 2004)

PART X - RELATIONS WITH THE GOVERNMENT AND GOVERNMENT AGENCIES

34. (1) The Bank may, on such terms and conditions as may be agreed with the Government –

(a) open accounts for and accept deposits in Seychelles rupees and in any foreign currency;

(b) undertake, as agent for the Government, the issue and management of Government securities;

(c) act as banker and fiscal agent of the Government in its dealings with any international financial institution and as depository of such institution; and

(d) open accounts for and accept deposits in Seychelles rupees and in any foreign currency from any Government agency.

(2) The Bank shall administer any law, as provided in that law, and may undertake any agency work for the Government in addition to those provided in subsection (1)(b) and (c) and section 35(d), within its area of competence.

35. (1) There shall be appointed by the Board for the purposes of this section, an Exchange Controller on such terms and conditions as may be determined by the Board.

(2) Where the Exchange Controller is for any reason unable to perform the functions of his office the Board may appoint a person to perform such functions until the Exchange Controller resumes such functions.

(3) The powers conferred on the Central Bank by sections 3, 5, 6, 8 and 11 of the Foreign Earnings (Regulation) Act are hereby vested in the Exchange Controller.

(4) The powers of the Minister under the Exchange Control Act to grant or revoke any permission, consent, approval or authority, or to give any direction or give or receive any notice under that Act in respect of any matter or thing that arose or may arise before on or after the coming into operation of this section or to compound any offence under that Act are hereby vested in the Exchange Controller.

(5) Notwithstanding anything to the contrary in any other law, any information obtained by the Exchange Controller by virtue of subsection (3) of this section may be used for the purpose of any inquiry or trial into or relating to any offence under the Foreign Earnings (Regulation) Act or the Exchange Control Act.

(6)(a) The Exchange Controller may give a directive in writing to any authorised dealer appointed under the Exchange Control Act requiring such authorised dealer to offer foreign exchange held by such authorised dealer for sale to the Bank or any other person on such terms as may be set out in the directive.

(b) An authorised dealer who fails, refuses or neglects to comply with a directive given under paragraph (a) shall be guilty of an offence and shall on conviction be liable to a fine of not less than R250,000 and not exceeding R500,000 or to imprisonment for a term not exceeding 5 years.

(7) The Exchange Controller may delegate any of his powers, other than the power conferred by this subsection, to any officer of the Central Bank.

36. In relation to international cooperation, the Bank –

(a) shall represent the Government in all intergovernmental meetings, councils and organisations concerning monetary policy, licensing and supervision of banks and other matters that are within its competence;

(b) may provide banking services for the benefit of foreign Governments, foreign central banks and monetary authorities, and for the benefit of international organisations in which it or the Government participates;

(c) may participate in international organisations that pursue financial and economic stability through international monetary cooperation; and

(d) may, as agent for the Government, undertake responsibilities and perform transactions concerning the Government’s participation in international organisations.

37. Without prejudice to any other provision of this Act, the Government and the Bank shall consult each other on all economic and financial matters that may affect the discharge of their respective statutory functions.

38. The Bank shall render advice and furnish reports on economic and financial matters to the Government when required to do so and the Bank shall be entitled to receive from any public authority any economic and financial information the Bank may reasonably need for that purpose.

39. The Government shall consult the Bank on the appropriations of the Government for each financial year and on any proposed legislation affecting the budget and the Bank.

40. (1) The Bank may, at such rates and on such other terms and conditions as may be determined by the Bank, grant temporary advances in Seychelles rupees to the Government in respect of temporary deficiencies of revenue.

(2) Subject to subsection (4), the total amount of such advances outstanding, including any advances converted into Government bearer securities in accordance with subsection (3) together with the amount of securities issued or guaranteed by the Government in the ownership of the Bank in accordance with section 41, except those under repurchase agreements, shall not at any time exceed the limit as determined by the Bank and published in the Gazette.

(3) All such advances shall be repaid as soon as possible and shall in any event be repayable not later than six months after the end of the financial year in which they are granted, and where such advances have not been repaid within such time, any advances will be converted into Government bearer securities at market rates as determined by the Bank.

(4) Notwithstanding subsection (2) the Bank may, in exceptional circumstances, grant a temporary waiver of the limit specified in that subsection, but only if such waiver would not be inconsistent with the monetary policy objectives of the Bank and would not cause the aggregate principal amount disbursed and outstanding on all Bank advances to the Government to exceed the equivalent of, as determined by the Bank, the annual average of the Government’s ordinary revenue for the three financial years immediately preceding for which accounts are available. For the purpose of this subsection "revenue" does not include borrowings, grants and other forms of financial assistance.

(5) If, in the opinion of the Bank, the limit as determined by the Bank under subsection (2) is likely to be exceeded, the Bank shall submit to the President a report on the Bank’s disbursed and outstanding advances to the Government and the causes that may lead to such excess, together with such recommendations as it may deem appropriate to forestall or remedy the situation and where the limit as determined by the Bank under subsection (4) is exceeded, the Bank shall make further reports and recommendations to the President and to the National Assembly.

41. The Bank may purchase or otherwise acquire treasury bills and other securities issued or guaranteed by the Government. Such purchases and other acquisitions by the Bank shall, however, be made only for monetary policy purposes and only on the secondary market at market interest rates.

42. The Bank may issue in its own name, for monetary policy purposes, short term debt securities.

43. The Bank may operate in the market, in addition to its undertaking as agent for the Government under section 34(1)(b), by purchasing, selling or conducting any other financial transaction in the conduct of its monetary policy framework, such as outright (spot and forward) or under repurchase agreements, debt securities issued or guaranteed by the Government and debt securities issued by the Bank.