Reserve Bank of Vanuatu

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Relationship between the Reserve Bank and the Government

Another important function of the Reserve Bank is to provide advisory services to the Ministry of Finance and Economic Management. Actions to coordinate fiscal policy (Ministry of Finance) and monetary policy (Reserve Bank) include the Reserve Bank informing the Minister on monetary developments and in return receiving updates on the government’s budget. These exchanges are done primarily through monthly cash flow meetings with the Treasury Department and the quarterly Macroeconomic Committee meetings. The Reserve Bank is also the principal banker of the Government. As such, the Government can deposit funds with the Reserve Bank (collected taxes) and make withdrawals to make payment for wages and goods and services. The Reserve Bank can also temporarily lend money to the government through the Government Overdraft Facility with the Reserve Bank