75. The Central Bank shall be responsible for the following functions with the approval of the Government: —
(a) formulating policies and prescribing regulations relating to gold and foreign exchange transactions conducted in the State;
(b) determining the exchange rates at which the Central Bank is to conduct its foreign exchange transactions;
(c) publishing daily the exchange rates of the Central Bank.
76. The Central Bank may, subject to such terms and conditions as prescribed from time to time, carry out the following: —
(a) buying, holding, selling and dealing in gold or other precious metals;
(b) buying, holding, selling and dealing in foreign currencies, using any instrument which is generally used in foreign exchange transactions;
(c) buying, holding, selling and dealing in treasury bills and other securities issued or guaranteed by foreign governments or intergovernmental financial institutions;
(d) opening and maintaining accounts with intergovernmental financial institutions, central banks, monetary authorities, and financial institutions outside the State;
(e) opening and maintaining accounts and acting as agent or correspondent for intergovernmental financial institutions, central banks, monetary authorities and financial institutions outside the State, and foreign governments and their agencies;
(f) borrowing, with the approval of the Government, in any foreign currency on such terms and conditions as it considers appropriate, and also giving security for such loans.
77. The Central Bank may, with the approval of the Government purchase, hold or sell shares or securities of intergovernmental financial institutions and of international associations of financial institutions.
78. (a) Any net gains in any year of the Central Bank arising from changes in the valuation of the Central Bank’s assets or liabilities in, or denominated in gold, special drawing rights, or foreign currencies as a result of any change in the values or exchange rates of gold, special drawing rights, internationally recognized units of account, or foreign currencies in terms of the domestic currency shall be credited to a special reserve account;
(b) Any net losses in any year of the Central Bank arising from any change mentioned in sub-section (a) shall be set off against any credit balance in the special reserve account. If such balance is insufficient to cover such losses, the Government shall issue to the Central Bank sufficient government securities to prevent an occurrence of a debit balance;
(c) The net gains referred to in sub-section (a) and the net losses referred to in sub-section (b) shall not be included in the computation of the annual net profits of the Central Bank.
(d) Any credit balance in the special reserve account of the Central Bank, at the end of each year shall be paid to a blocked government account. Such credit balance shall earn interest at the same rate of interest as the Government pays on Central Bank advances. The principal may only be used to retire government securities issued under sub-section (b);
(e) No credits or debits shall be made to the special reserve account except in accordance with the provision of this section.
79. The Central Bank may, in its own name or on behalf of the Government or for the account of and by order of the Government, enter into clearing and payments agreements or any other contracts with the same purpose with similar public and private financial institutions established abroad.
80. The Central Bank shall be responsible for establishing and maintaining, on such terms and conditions as it may from time to time determine, and having due regard to the liquidity and risk associated with the relevant assets, international reserves which shall consist of some or all of the following: —
(b) foreign exchange;
(c) bills of exchange and promissory notes payable in such foreign currencies and in such places as the Central Bank may, for the purposes of this section approve;
(d) any internationally recognized reserve asset, including the following: —
(i) the option to make a reserve tranche purchase from the International Monetary Fund;
(ii) holdings of special drawing rights.
81. (a) The Central Bank shall use its best endeavours to maintain the international reserve established under section 80 at a level which the Central Bank considers is adequate for the State’s international transactions;
(b) If the international reserve has declined or if the Central Bank considers that it is in danger of declining to such extent as to jeopardize its adequacy in terms of the State’s international transactions, the Central Bank shall submit to the Government a report on the international reserve position and the causes which have led or may lead to such a decline including such proposals as it considers necessary to remedy the situation;
(c) Until such time as, in its opinion the situation has become normal, the Central Bank shall continue to submit reports and proposals at intervals not exceeding three months.
82. The Central Bank may advise the Government as to the measures to be taken, the terms and conditions, and other facts relating to the external indebtedness that the State may from time to time incur. The Central Bank shall obtain from the Ministry, upon request up-to-date inventory of all the foreign indebtedness contracted or guaranteed by the State so as to be able to advise.
83. The Central Bank shall, as the agent of the Government, administer the laws relating to the control of foreign exchange. In so administering, it shall have the right to carry out the following functions: —
(a) licensing, revoking the licences of, inspecting, supervising and regulating persons who deal in foreign currencies;
(b) determining limits on foreign exchange assets which persons authorized to deal in foreign exchange may hold;
(c) determining limits on the net foreign asset position of persons dealing in foreign exchange, in each and all currencies, the amount of the external indebtedness of such persons as well as the terms and conditions as may be necessary.