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Financial Markets Division
The Financial Markets Division (FMD) is responsible for the implementation of the Central Bank’s monetary policy and the management of the country’s foreign exchange reserves, as well as the issuance and management of government securities on behalf of the Government. It has as its main objective the development of the financial markets to ensure well-functioning and efficient money and foreign exchange markets.
FMD executes front office functions by undertaking financial market transactions on behalf of the Bank. The middle office functions also fall within FMD with the aim of ensuring that the Bank does not engage in activities which could be detrimental to its financial health and reputation, whilst implementing its policies. The back office functions which include confirmation and settlement of these financial transactions, fall under the responsibility of the Banking Services Division.
1. Market Operations Section
This section is responsible for the implementation of monetary policy mainly through the conduct of the Bank’s open market operations as approved by the Monetary Operations Committee (MOC), as well as responsible for the issuance and management of government securities on behalf of the Government. It also carries out operations related to the Bank’s standing and emergency facilities.
2. Reserve Management Section
The Reserve Management section handles the day-to-day management of the foreign exchange reserves in compliance with the Board’s approved Investment Policy and the Investment Guidelines set by the Investment Committee (IC). International reserves are managed considering the investment policy objectives of capital preservation, liquidity management and maximising returns in that order of priority. The section makes recommendations to IC with regard to investment strategies and executes investment decisions on behalf of the Bank.
3. Financial and Risk Analysis Section
The section is responsible for the middle office functions of the Bank. This involves undertaking market research and in-depth analysis on the domestic/international financial markets and reserves management so as to provide analytical support to the front office (the other 2 sections) and IC. In addition, it constructs appropriate benchmarks, develops models and/or tools for use by the front office as well as designs strategies so as to meet set targets/objectives. Moreover, the section is responsible for measuring and reporting financial risks involved in undertaking market operations and reserves management activities as well as monitoring compliance of these activities against set limits, guidelines, policies and approved strategies.