Bank of the Republic of Haiti Economic Policy and Management

The Bank of the Republic of Haiti plays a vital role in the country's economic policy and management. The bank's primary objective is to maintain price stability and ensure the stability of the financial system.

The bank's monetary policy decisions are guided by its independence and autonomy. This allows it to make decisions without interference from the government or other external factors.

The bank's management team is responsible for implementing monetary policy and managing the country's foreign exchange reserves. This team works closely with the government to ensure that economic policies align with the country's overall development goals.

The bank's economic policy framework is designed to promote economic growth and stability. This includes maintaining a stable exchange rate, controlling inflation, and promoting financial sector development.

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The Bank of the Republic of Haiti (BRH) has made significant strides in strengthening its monetary policy framework. The BRH has a ceiling on credit to the non-financial public sector (NFPS) as the main anchor to limit monetary financing of the deficit to 1.5 percent of GDP.

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To manage excess liquidity in the banking system and strengthen policy transmission, the BRH conducts short-term liquidity operations at a fixed rate with full allotment, including at seven days. This helps to reduce potential inflationary pressures.

The BRH aims to raise short-term interest rates further to spur disinflation, given the large negative real rate at about 15 percent and the cost of inflation for the poor. However, the authorities are also taking into account the fallout on an economy that has contracted for the fourth consecutive year.

The BRH should continue to limit its interventions in the foreign exchange market to smoothing excessive or volatile exchange rate fluctuations. This is achieved through prudential measures, including interest rate increases and reserve requirements.

Here are some key reforms the BRH is considering to enhance the transparency of interventions and encourage banks to improve their liquidity management:

The BRH is committed to not imposing or intensifying restrictions on the making of payments and transfers for current international transactions and introducing or modifying multiple currency practices.

The Bank of the Republic of Haiti has been working hard to implement its Program, supported by the Staff Monitored Program (SMP). Program performance has been broadly satisfactory, with policies moving in the right direction, especially on the structural front.

The authorities met one June quantitative target, which was net credit to the government. They missed three other targets, with one missed by a small margin.

Here's a breakdown of the quantitative and indicative targets met and missed by the authorities:

The authorities have taken broadly satisfactory steps on structural reforms, capacity building, and governance, meeting the two monthly and quarterly structural benchmarks (SB). The SB for end-June was met, while four of the five end-September SBs were completed with delay.

The authorities have shown continuous ownership of the SMP, leading to real progress in certain areas, notably in strengthening public finance institutions and governance.

The Bank of the Republic of Haiti has a significant role in managing the country's external affairs. The bank has a special account for foreign exchange earnings, which helps stabilize the country's currency.

The bank's involvement in external affairs is crucial for Haiti's economic development. The bank manages the country's foreign exchange reserves, which are used to settle international transactions.

Haiti's dependence on foreign aid has led to the bank's involvement in managing external debt. The bank works with international organizations to restructure and manage Haiti's debt, ensuring the country's financial stability.

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The Net Credit to Nonfinancial Public Sector is a key indicator of a country's financial health.

The Bank of Haiti (BRH) reports that as of September 2022, the Net Central Bank Credit to the Nonfinancial Public Sector was 216,907,796.47 million gourdes.

This figure has been increasing over the years, with a significant jump from 160,047,059.23 million gourdes in September 2021 to 216,907,796.47 million gourdes in September 2022.

The increase in net credit is largely due to the BRH's claims on the central government, which rose from 200,791,090.44 million gourdes in June 2022 to 269,884,127.20 million gourdes in September 2022.

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However, the BRH also experienced a decrease in net credit to the rest of the nonfinancial public sector, from -2,149,918.76 million gourdes in June 2022 to -3,346,147.14 million gourdes in September 2022.

Here is a breakdown of the Net Central Bank Credit to the Nonfinancial Public Sector as of September 2022:

Note that these figures are subject to change and may not reflect the current situation.

Net International Reserves are a critical component of a country's financial stability. They are the external assets available to and controlled by the monetary authorities for meeting balance of payments financing needs and maintaining confidence in the currency and economy.

Gross international reserves include monetary gold, liquid assets, Special Drawing Rights (SDRs), and IMF reserve position. As of September 2022, Haiti's gross international reserves stood at 11,412,086.84 gourdes or 112,977.20 US dollars.

The calculation of net international reserves involves subtracting various liabilities from the gross international reserves. This includes foreign liabilities, deposits in foreign currency, foreign currency swap transactions, special accounts in foreign currency, and project accounts.

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As of September 2022, Haiti's net international reserves were 9,935,598.92 gourdes or 98,360.29 US dollars. This is a significant decrease from June 2022, when the net international reserves stood at 28,020,274.18 gourdes or 280,168.28 US dollars.

Budgetary grants can also impact the net international reserves. If budgetary grants are lower than expected, the floor on net international reserves will be adjusted downwards by the amount of the difference. For example, if budgetary grants are 9.1 million US dollars lower than expected in June 2022, the floor on net international reserves will be adjusted downwards by 9.1 million US dollars.

Here's a breakdown of the projected budgetary grants for Haiti:

The projected budgetary grants indicate that Haiti received 18.8 million US dollars in budgetary grants between September 2022 and June 2023.

Public sector non-concessional external debt contracts are typically bilateral and involve a sovereign borrower and a lender government.

These contracts often have a fixed interest rate and a set repayment schedule, which can be negotiated based on the borrower's creditworthiness.

The majority of public sector non-concessional external debt contracts are denominated in major currencies such as the US dollar, euro, or yen.

This is because these currencies are widely accepted and easily convertible, making it easier for borrowers to repay their debts.

The terms of public sector non-concessional external debt contracts can be influenced by the lender's development goals and the borrower's economic situation.

For example, a lender may offer more favorable terms to a borrower that is experiencing economic difficulties.

Public sector non-concessional external debt contracts often have a maturity period of 10-20 years, although this can vary depending on the agreement.

This allows borrowers to gradually repay their debts over time.

The repayment of public sector non-concessional external debt contracts is typically made through a combination of interest payments and principal repayments.

This can be done through various channels, including wire transfers or loan repayments.

Public sector non-concessional external debt contracts can be used to finance a wide range of development projects, including infrastructure, energy, and transportation.

These projects can help to improve the borrower's economic and social development.

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The Bank of the Republic of Haiti (BRH) has been taking steps to regulate the use of credit cards in the country.

Commercial banks operating in Haiti have been warned of heavy fines if they flout new regulations regarding the invoicing of credit card transactions effective December 1.

Banks and credit card companies are required to display day rates visibly at least two points of each of their branches for consumer protection.

Failure to comply with the new measures may result in a letter of reprimand from the central bank against the offending institution.

A fine of 100,000 gourdes will be imposed for each violation found, and will be deducted from the balance of one of the accounts of the bank found at fault with the central bank's directive.

The payment of any fine by a credit card company will be made by management cheque payable to the Bank of the Republic of Haiti, no later than three working days after receipt of the notice requiring payment.

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The Bank of the Republic of Haiti (BRH) has taken steps to strengthen its monetary and exchange rate policy frameworks. This includes adopting a ceiling on credit to the non-financial public sector (NFPS) to limit monetary financing of the budget deficit.

The BRH aims to limit monetary financing to 1.5 percent of GDP, a level estimated to be non-inflationary. This will be achieved by adopting a ceiling on the BRH's credit to the NFPS.

The BRH will continue to limit its interventions in the foreign exchange market to smoothing excessive volatility of the exchange rates. This will involve increasing the net international reserves (NIR) and reducing foreign exchange sales.

The BRH is also considering putting in place an appropriate foreign exchange intervention mechanism, such as weekly FX auctions, in lieu of the foreign exchange allocation system.

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The Bank of the Republic of Haiti (BRH) has made significant progress in governance, but more efforts are needed. The authorities have published public procurement contracts, including tenders, contracts, and the beneficial owners of successful bidders.

Since the adoption of the November 2021 decree on transparency requirements, the authorities have been strictly enforcing governance arrangements. Staff has followed through with the implementation of this continuous monitoring system.

To monitor the implementation of social programs, the authorities have committed to follow good Public Financial Management (PFM) practices, in line with recent technical assistance from the IMF. They agreed to introduce all social expenditure into the budget and all associated financing in the Single Treasury Account at the central bank.

The authorities have activated budgetary mechanisms to carefully monitor, record, and publish all expenditure related to the emergency response. They will publish comprehensive monthly reports on the execution of the budget, no later than 45 days after the end of each month.

The BRH should resume its efforts to implement the remaining overdue 2019 safeguards recommendations. Some recommendations have been implemented, including the publication of the FY 2021 financial statements.

The BRH has progressed towards an agreement with the Ministry of Economy and Finance (MEF) on consolidating government debt and the internal audit function plans to verify program monetary data at program test dates.

Staff Appraisal is a crucial process at the Bank of the Republic of Haiti, where employees are evaluated based on their performance, goals, and development needs. The bank uses a formal appraisal system to assess employee performance and provide feedback.

The appraisal process typically takes place twice a year, in January and July, and involves a thorough review of employee performance, goals, and development plans. This ensures that employees are held accountable for their actions and are given the necessary support to improve.

To make the process more effective, the bank provides employees with a clear understanding of their roles and responsibilities, as well as specific goals and objectives to achieve. This helps employees stay focused and motivated throughout the year.

During the appraisal process, employees are given the opportunity to provide feedback on their job satisfaction, work environment, and overall experience at the bank. This feedback is taken seriously and is used to make improvements to the work environment and employee experience.

The bank's staff appraisal process is designed to be fair, transparent, and unbiased, with a focus on promoting employee growth and development. This approach helps to create a positive and productive work environment that benefits both employees and the bank as a whole.