AMBD plays crucial role in supporting financial stability

James Kon

Autoriti Monetari Brunei Darussalam (AMBD) plays an important role in ensuring financial stability and supporting the development of the financial sector.

The primary role of AMBD in the financial sector was highlighted by Minister at the Prime Minister’s Office Dato Seri Setia Haji Awang Abdul Mokti bin Haji Mohd Daud, in his keynote speech for the AMBD 10th Anniversary (2011-2021) Seminar, held at The Rizqun International Hotel yesterday.

“In balancing the supervision and development of the financial sector, AMBD recognises the importance of supporting innovation and competition in the financial sector in encouraging economic growth. A well-regulated and stable financial sector helps attract businesses to Brunei Darussalam,” he said.

Dato Seri Setia Haji Awang Abdul Mokti, who is also a member of AMBD’s Board of Directors, disclosed, “Over the past decade, there has been massive transformation in the financial sector landscape. As we navigate through these changes, AMBD has adopted lessons from the 2008 Global Financial Crisis. In this regard, AMBD has adopted a risk-based supervisory approach and works proactively with other financial industry players with a collective view to ensure the stability of the financial system.

“AMBD has also been working continuously to uphold and protect the integrity of our financial sector and the reputation of our country from the threat of financial crimes through the Financial Intelligence Unit (FIU), AMBD.

“FIU’s role as the Secretariat to the National Anti-Money Laundering and Combatting the Financing of Terrorism Committee (NAMLC) enables AMBD to support national coordination with law enforcement agencies and relevant government agencies. The FIU also has a role in improving overall compliance of financial institutions and designated non-financial businesses to Brunei Darussalam’s anti-money laundering and combatting of terrorist financing (AML/CFT) framework.”

He also highlighted the many achievement of FIU, saying, “Alhamdulillah, I am happy to share that in 2020, FIU won the Best Egmont Case Award (BECA). We take pride in this achievement, as it shows our young organisation’s capability to successfully execute cases through efficient and coordinated action with other domestic and international agencies. I convey my congratulations to AMBD.

Minister at the Prime Minister’s Office Dato Seri Setia Haji Awang Abdul Mokti bin Haji Mohd Daud. PHOTO: JAMES KON

“Developing and transforming a financial sector is not an easy task. AMBD’s Financial Sector Blueprint (FSBP) 2016-2025 outlines AMBD’s aspirations for a Dynamic and Diversified Financial Sector to help achieve the overarching goal of a dynamic and sustainable economy under Brunei Vision 2035.

“FSBP lays out the five pillars which reflects AMBD’s broad strategies and policy directions. Now in its sixth year, I am pleased to share that with close cooperation with the industry and other stakeholders, many of these policy directions have already been achieved.

“The publications of Digital Payment Roadmap for Brunei Darussalam (2019-2025) in 2018 and the White Paper on The State of FinTech in Brunei Darussalam in 2020 by AMBD aim to aid in realising the country’s aspiration of a digital economy. At the same time, AMBD continues to explore innovations related to green finance and its impact on financial stability.

“In building our profile and position in the international arena, AMBD continues to build strategic partnerships with other central banks and monetary authorities internationally, through the signing of memoranda of understanding, and active participation in ASEAN meetings and international bodies.

“AMBD has also had the privilege to chair international meetings such as the ASEAN Central Bank track, Islamic Financial Services Board Council (IFSB), The South East Asian Central Banks (SEACEN) Research and other training centres.”

Earlier, Dato Seri Setia Haji Awang Abdul Mokti said, “Under the guidance and wise leadership of His Royal Highness Prince Haji Al Muhtadee Billah, the Crown Prince and Senior Minister at the Prime Minister’s Office, in his capacity as the Chairman of AMBD, AMBD has strived to be an organisation with core values of excellence, integrity, innovation and teamwork.

“Like many new organisations, AMBD spent its early days fortifying its foundation and operations. AMBD focussed on enhancing resources, putting in place good governance to be transparent and accountable; while at the same time working towards delivering its four objectives,” he said.

“AMBD’s first objective as a monetary authority is to maintain domestic price stability. What many may not be aware is that the currency notes and coins you have in your wallets are issued by AMBD. In fact, we have been minting our own coins in Brunei Darussalam for over 20 years since 2001.”

“The value of Brunei’s currency is pegged to the Singapore Dollar – made possible through our long-standing bilateral financial cooperation with Singapore through the Currency Interchangeability Agreement (CIA), which has been in place since 1967. This has led us to enjoy a stable currency and stable prices for more than 50 years, giving the public confidence when using our money.

“In addition, the Currency Board Arrangement forms the basis of our monetary policy, where to date, we continue to build on our capacity to carry out central banking responsibilities. This includes managing our currency reserves to back the money in circulation, acting as the banker and financial agent to the government, as well as enhancing our monetary operations by introducing monetary tools, such as the Overnight Reference Rate (ORR) and Overnight Standing Facilities.

“These monetary tools could not have been made possible without our prior work in modernising our National Payment and Settlement System (PSS). These significant steps taken include the establishment of the Real Time Gross Settlement, the Automated Clearing House (ACH), and the Central Securities Depository (CSD).”

Dato Seri Setia Haji Awang Abdul Mokti also shared the four main objectives to be achieved by AMBD: “The first one being to achieve and maintain domestic price stability; secondly, to ensure the stability of the financial system, in particular, by formulating financial regulations and prudential standards; third, to assist in the establishment and functioning of efficient payment systems and to oversee them; and lastly, to foster and develop a sound and progressive financial services sector.

“These objectives outline AMBD’s responsibility to act as a monetary authority as well as the country’s financial services authority. These roles have been merged under one organisation to achieve greater synergy and maximise efficiency.”