Central Banking in The Bahamas

The Central Bank, as the premier financial institution, is entrusted with the responsibility of formulating and conducting monetary policy on behalf of the Government by exercising discretionary control over the monetary and financial system. Monetary policy plays a very important role in the process of economic growth and development and the Central Bank is empowered with various tools of monetary and credit control which can be applied singly or in combination to achieve various policy objectives such as a stable rate of economic growth; a high level of employment; stability in the purchasing power of the local currency and a viable balance of payments position. This article will essentially be concerned with the operations of the Central Bank as it relates to the domestic banking system. However it will also examine the Bank's relationship with the offshore banks as this is a unique feature of central banking in The Bahamas.