Subject: KY: Central bank precursor inaugurated - Kyodo

East Timor: Central bank precursor inaugurated - Kyodo BBC Monitoring Service - United Kingdom; Feb 28, 2001

Text of report in English by Japanese news agency Kyodo

Dili, East Timor, 28 February: The East Timor Central Payments Office (CPO), expected to become the territory's central bank, was officially inaugurated Wednesday [28 February] by Sergio Vieira de Mello, the chief of the UN Transitional Administration in East Timor (UNTAET).

The CPO was established in January 2000 by UNTAET to formulate and implement payment system policies as well as to transact in legal tender and provide payment and storage services for foreign governments and foreign banks.

Fernando de Peralto, CPO general manager, told Kyodo News that since its creation, the CPO has issued bank licences and is developing regulations to manage payment systems in the territory.

"We have given licences to two commercial banks...[ellipsis as received] We will examine the payments systems to ensure transactions are safe and the public is protected," he said.

He said, however, that it may take some time to fully develop the functions.

He said the CPO would soon be transformed into a Payments and Monetary Authority, which will then evolve into a central bank for the territory.

On the future currency of the territory, de Peralto said an International Monetary Fund mission is currently in East Timor to discuss currency issues with the territory's leadership.

He said the selection of a currency and the question of whether or not East Timor will have a national currency are decisions for the future government to make.

East Timor is under UNTAET control as it moves towards full independence.

Source: Kyodo News Service, Tokyo, in English 1338 gmt 28 Feb 01

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