Revised Laws of Saint Lucia (2023)

PART VII
FOREIGN EXCHANGE OPERATIONS

25.   The bank as depository of the external assets

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   (1)   The Bank shall be the depository of the external assets of the Participating Governments provided that the Bank may designate such agents and correspondents as it may select to hold these assets.

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   (2)   The Bank may serve as the depository of the external assets of boards, agencies, the social security fund and other statutory bodies of such Participating Governments.

26.   Dealing in gold or silver

The Bank may—

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   (a)     buy, sell, or deal in gold coins or bullion or other precious metals;

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   (b)     buy, sell, or deal in foreign exchange, using for these purposes any of the instruments commonly used by bankers;

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   (c)     open and maintain accounts abroad;

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   (d)     open and maintain accounts and act as agent or correspondent for foreign central banks, foreign financial institutions, foreign governments, foreign government agencies and institutions and international financial institutions.

27.   Institutions with which bank may deal in foreign exchange

The Bank shall deal in connection with the operations enumerated in Article 26 hereof only with the Participating Governments, their boards and agencies, their social security funds and other statutory bodies, local government bodies, foreign central banks, local and foreign financial institutions, foreign governments, foreign government agencies and institutions and international financial institutions.

28.   Terms of transactions in foreign exchange

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   (1)   The Bank shall from time to time determine the rates at which it will buy, sell or deal in gold and foreign currencies.

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   (2)   The Bank may determine and make public the rates at which gold and foreign as currencies may be bought, sold or dealt in by banks and other persons authorised to do so in the territories of the Participating Governments.

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   (3)   The Bank may close the foreign exchange markets for the Eastern Caribbean Dollar in the territories of the Participating Governments during a period of not more than 2 working days if it deems such action to be necessary to prevent disorderly conditions in the foreign exchange markets and considers it to be in the interest of the Participating Governments:

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   Provided that the Bank may request the Council that a reasonable extension of the period of closure be granted, during which the Bank shall proceed to remove the causes of the disorder.

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   (Amended by S.I. 48/1991)

29.   Revaluation reserve account

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   (1)   The gains arising from any change in the valuation of the Bank's assets or liabilities in, or denominated in gold, special drawing rights or foreign currencies as a result of alteration of the external value of the Eastern Caribbean Dollar, or of any change in the value of such assets or liabilities relative to the Eastern Caribbean Dollar, shall be credited to a special account entitled “Revaluation Reserve Account” and neither the gains nor the losses arising from any such change shall be included in the computation of the annual profits and losses of the Bank.

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   (2)   Any gain arising from changes described in paragraph (1) of this Article during any financial year of the Bank shall be used—

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      (a)     first, to redeem any securities held by the Bank as a result of previous losses in accordance with paragraph (4) of this Article;

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      (b)     second, to create or increase the credit balance in the Revaluation Reserve Account.

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   (3)   Any credit balance in the Revaluation Reserve Account at the end of each financial year of the Bank shall be held in reserve, and shall be used only for the purpose described in paragraph (4).

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   (4)   The losses arising from changes described in paragraph (1) of this Article shall be set off against any credit in the Revaluation Reserve Account and, notwithstanding any other provisions of this Agreement, if such balance is insufficient to cover such losses, the Participating Governments shall issue and cause to be transferred to the ownership of the Bank non-interest bearing, non-negotiable securities to the extent of the deficiency in the proportions according to which profits may be distributed to each Participating Government pursuant to Article 6 paragraph (4) of this Agreement.

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   (5)   No credits or debits shall be made to the Revaluation Reserve Account except in accordance with the provisions of this Article.