C.B.S.I RECORDED $165 MILLION NET OPERATING LOSS IN 2013

Governor Denton Rarawa. Photo credit: CBSI.

Governor Denton Rarawa. Photo credit: CBSI.

The Central Bank of Solomon Islands, CBSI, has recorded a Net Operating Loss of 1-hundred and 56 million dollars in 2013.

Presenting the bank’s 2013 financial performance in Honiara this week, Bank Governor Denton Rarawa said last year has been a difficult financial year for CBSI.

He said while the country’s economy may have had comfortable reserves, interest rates on the global financial markets were very low.

He says the bank’s return on its external investments was under one percent adding, while it was able to achieve a break-even position generated from these investments, it was insufficient.

“So while the bank was able to achieve a break-even position from the income it generated from these investments, it was not sufficient to cover the losses incurred due to foreign currency movements against the Solomon Islands dollar. As a result, the bank recorded a Net Operating Loss of a hundred and sixty-five million due in large part to the unrealised foreign exchange revaluation losses of a hundred and fifty million, so while the economy may have benefited from an appreciating and stable Solomon Islands dollar, the bank bore the brant total cost of that policy.”

Meanwhile, the Central Bank Governor said the printing of notes and minting of coins is a very expensive exercise for the bank.

Presenting on currency developments in the country, Mr Rarawa said CBSI has issued a new fifty dollar bank note with the latest security features in September last year, the first of a family of new notes that will be rolled out over the coming years.

He urged the public to carefully handle bank notes, as it is costly to print and mint new notes and coins adding, the CBSI Board has decided to repay the costs.

“Printing of notes and minting of coins is a very expensive exercise and it is in this spirit that I am urging the public to handle bank notes with care in support of the Central Bank’s New Clean Note Policy. The board also decided to use the provision of the CBSI Act to amortize the cost of printing and minting coins. In the past the practice has been where the bank was required to write-off millions of dollars for the cost of new currency notes and coins that are yet to be injected into circulation.”

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