Rationale to Circular 114-2
Summary: Rationale to Circular 114-2 of the Bank of the Republic of Haiti — an instrument published alongside circular 114-2, not the circular itself. Circulars are the operative prudential rules for supervised institutions, covering matters such as capital and liquidity requirements, credit-risk and governance standards, reserve requirements and foreign-exchange rules.
Key Findings
- The BRH rationale explains Circular 114-2 as implementation of the 5 June 2020 decree giving the central bank responsibility for setting rules on international transfer operations.
- It says Circular 114-1 was delayed and modified into Circular 114-2 to balance stakeholders' interests and allow formalization of some agents previously operating outside regulation.
- The circular is framed as consumer protection because international transfers paid at service points or through payment instruments must be paid in gourdes at the BRH reference rate, while transfers to dollar accounts at deposit institutions must be paid in dollars.
- BRH argues that the measures will improve transparency and governance in international transfers and reduce money-laundering and terrorism-financing risk.
- The rationale also links the circular to the scarcity of dollar cash, saying informal foreign-exchange transactions absorb much of international-transfer flows and keep notes outside the formal deposit-institution circuit.
How to cite
Bank of the Republic of Haiti (BRH), 2020, Rationale to Circular 114-2, https://www.brh.ht/wp-content/uploads/Argumentaires_Circulaire-114-2.pdf