Responsibilities for Vatu Banknotes and Coins

The Reserve Bank of Vanuatu Act [CAP 125] confers on the Reserve Bank of Vanuatu the responsibility for the production and issue, reissue and cancellation of Vatu banknotes and coins.

The RBV manages its currency operations through its Currency Office which arranges for the Vatu banknotes to be printed and supplied by De La Rue Currency, UK and the Vatu coins to be minted and supplied by the UK Royal Mint.

Vatu notes and coins are issued to and withdrawn from public circulation through the commercial banks from the Bank in Port Vila.

Achieving a Clean, Counterfeit-Free Circulation

The RBV aims to have only good quality Vatu notes and coins in circulation to combat counterfeiting issues and help maintain confidence the currency.

To achieve this, the RBV has established quality standards for banknotes and coins in circulation as set out in Note Sorting Guidelines for the banks to adhere to and identify unfit notes and coins for withdrawal from circulation. The RBV performed random quality checks on presorted lodged banknotes and coins to ensure good quality is maintained.
The unfit notes and coins are lodged with RBV for disposal while the counterfeits are reported to the authorities for further investigation.

Guide to Security features of banknotes are available for the public and others for familiarization against counterfeiting.

The registry section of the banking office records the details of the RBV Notes that the Bank though its open market operation program issues to the market on a weekly basis. These instruments are used to manage the level of liquidity in the banking system in line with the monetary policy requirements of the Bank from time to time.

The Government of Vanuatu from time to time, raises funds for development purposes through the issuing of Government Bond instruments. These instruments are processed and tendered to the public on behalf of the Government by the Reserve Bank. At processing, each tender is processed and registered with the successful bidder issued a certificate.

The Reserve Bank of Vanuatu provides banking services to a specific client based under the provisions of the RBV Act. The Bank’s clients are the Government of Vanuatu, represented by the Department of Finance and Economic Management, the commercial banks and international financial institutions that have a relationship with the Bank and Government of Vanuatu. ( IMF, World Bank, etc).

Banking services offered includes deposits and withdrawals through the customer teller area, processing and clearing of cheques through the Port Vila Clearing House and the processing of international payments and transfers through the SWIFT payment system.

Each client maintains a number of accounts with the Bank . These accounts are used for various purposes. Commercial banks net daily payment obligations processed through the Port Vila clearing House and  SWIFT are processed through the Exchange Settlement (ES) Accounts that they maintain with the Reserve Bank.

As a banker to the Government the Reserve Bank also perform other banking services to the Government, as and when required.

The Financial Markets Department is responsible for implementing the Reserve Bank’s operations in domestic and foreign exchange markets, monitoring developments in domestic and international financial markets, the assessment, monitoring and control of risk on the Bank’s financial markets operations to ensure compliance with investment and settlement procedures as well as coordinating the Bank’s relationships with counterparty financial institutions and brokers. The department ensures that the country’s foreign reserves are managed within the parameters of preservation of capital, liquidity and profitability.

The Financial Markets Department is divided into three units: External Markets Unit, Domestic Markets Unit and Risk Management Unit.

External Markets Unit - responsible for the Bank’s foreign exchange operations, the investment of international reserve holdings of foreign exchange, and to provide regular advice on the developments in international financial markets  to the Governor, the Investment Committee and the Monetary Policy Coordinating Committee.  The unit is also responsible for sustaining the Bank’s relations with counterparty financial institutions and brokers.

Domestic Markets Unit – Responsible for the Bank’s operations in domestic money and bond markets. The unit is charged with the implementation of monetary policy by carrying out Open Market Operations as well as facilitating the trading of government securities.

Risk Management Unit - Responsible for monitoring and control of risk on the Bank’s financial markets operations to ensure compliance with investment guidelines and settlement procedures.