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| Additional information |
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| Banco Central de Chile |
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Profile:
To meet its objectives, the Central Bank has a series of operating functions and attributes regarding the following areas: the issue of bank notes and coins, the regulation of the amount of money in circulation and credit, the regulation of the financial system and the capital market, faculties to preserve financial system stability, functions as part of its role as fiscal agent, attributes in terms of international questions, attributes regarding foreign currency operations and statistical functions.
The essential characteristics of these functions and attributes are described below:
1. Emission: The Central Bank has the sole authorities to issue bank notes and coins. Bank notes and coins issued by the Central Bank are the sole, legally recognized medium for payment, enjoying unlimited circulation, and legal validity throughout the country.
2. Regulation of the amount of money in circulation and credit: The Central Bank can open lines of credit, provide refinancing and discount or rediscount negotiable documents in Chilean or foreign currency, for banking companies and financial firms; set reserve rates that, in proportion to deposits and obligations, must be met by these bodies and savings and credit cooperatives; cede documents from its lending portfolio or investment to banks and finance companies or acquire from same documents for its lending or investment portfolios, and finally, carry out actions on the open market.
3. Regulation of the financial system and the capital market: The Central Bank is empowered to regulate the deposit of the public's funds by banking or finance companies and savings and credit cooperatives; to set the maximum interest rates that can be paid by these bodies on demand deposits; decide the rules and limitations on banks and finance companies in terms of guarantees and warranties in foreign currency; establish the ratios between asset and liability operations on the part of banking firms, finance companies and savings and credit cooperatives; regulate the functioning of compensatory bodies; and authorize indexing systems to be used in credit operations involving Chilean currency by banks, finance companies and savings and credit cooperatives. In credit operations using Chilean currency that does not form part of these bodies, any kind of indexing system may be agreed upon, without the approval of the Central Bank.
4. Faculties to ensure the stability of the finance system: These attributes include two essential elements: the first is providing banks and finance companies in the case of urgency and for a period of no more than 90 days, when these face a temporary liquidity problem, with operations that fall within the function of lender of last resort that corresponds to central banks; and second, grant credits or acquire assets from these same bodies when a contract has been proposed or these have been declared in bankruptcy.
5. Bank functions as fiscal agent: The Central Bank, upon the request of the finance minister, may act as fiscal agent in the contracting of external and domestic credits and in those operations compatible with the institution's goals.
6. Attributes in international issues: The Bank has the faculty to participate and operate with foreign or international financial bodies; contract all kinds of credits abroad; issue securities and place them abroad; grant credits to international or foreign states, central banks, banks and financial institutions, when the purpose of these credits is to meet Bank objectives; and maintain, manage and dispose of its foreign currency reserves in the country or abroad.
7. Faculties in terms of foreign exchange operations: The Central Bank is empowered to formulate and manage foreign exchange policies. Nonetheless, foreign trade policies correspond to the President of the Republic, and shall be implemented through the different ministries and the national customs service. The Central Bank nonetheless maintains information systems on foreign trade operations with regard to their foreign exchange implications (returns and export liquidation, import coverage).
8. Statistical functions: The Central Bank must publish opportunely the main national macroeconomic figures, including those of a monetary and foreign exchange nature, the balance of payments and national accounts.
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| Telex:
240461 CENBC CL ; 441055 CENBC CZ |
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