Loading ...BUSINESS GUIDE –> Monetary Matters
The Tongan banking system is overseen by the National Reserve Bank of Tonga (NRBT), which supervises in accordance with Basel Core Principles. There are three commercial banks (ANZ, Malaysian-Borneo Finance, and the Westpac Bank of Tonga) and one development bank (Tonga Development Bank). In addition there are several non-bank financial institutions.
Local borrowing
The Foreign Exchange Control (Amendment) Regulations 2000 require the prior approval of the NRBT of all local borrowing by non-resident controlled entities exceeding T$50,000. There are no restrictions on foreign borrowing.
Repatriation of funds
There are no restrictions on the repatriation of funds sourced from offshore as long as there is evidence of funds originally being brought onshore. The NRBT’s prior approval is required for all outward current transfers of T$50K and above, and all capital transfers regardless of the amount. These applications are readily approved if all documentary evidence is provided. Approval for all outward current transfers of less than T$50,000 have been delegated to the commercial banks and authorized restricted foreign exchange dealers.
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The NRBT’s Exchange Control Policy Guidelines lists all documentary requirements for each type of payment which are available for use by the banks, authorized restricted foreign exchange dealers and the public.
Foreign Exchange
The NRBT establishes the value of the Tongan Pa’anga daily by reference to a weighted basket of currencies of Tonga’s most important partners in foreign trade and payments transactions. The NRBT quotes daily buying and selling rates for the US dollar against the Tongan pa’anga. These rates generally form the basis of the commercial banks’ publicly quoted foreign exchange dealing rates.
Interest Rates
Interest rates are determined by the market. The NRBT’s Prudential Statement No. 4, Disclosure of Interest Rates and Fees & Charges (effective 2 August 2007), requires banks to publicly disclose the interest rates and fees and charges relating to their products and services. The general public should be clearly informed of the interest rates and fees and charges to enable them to compare between various services/products and providers. This in turn fosters competition and market discipline.
Relevant contacts & links: NRBT’s Exchange Control Policy Guidelines
http://www.servebank.to/docs/econtrol/ECPOLICYGUIDELINESDecember2006.pdf
