Regulatory Alerts2017-03-08
Foreign Currency Open Positions - Prudential Guideline No. 3
The Central Bank of Solomon Islands requires all licensed financial institutions to maintain foreign currency open positions within strict prudential limits to mitigate exchange rate risk. Institutions must cap single-currency exposures at 15 percent and overall exposures at 25 percent of total capital, calculate these positions daily using spot mid-rates, and establish board-approved internal monitoring policies. Compliance requires submitting monthly position reports within twenty days, retaining daily records for seven years, and immediately rectifying breaches, with non-compliance triggering enforcement actions under the Financial Institutions Act 1998.
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