Despite the global inflation forecast which is expected to remain elevated, combined with disruptions on global supply chains which are likely to persist in the near-term, the Brunei Darussalam Central Bank (BDCB) expects its impacts on the Sultanate’s overall inflation to be low given the tightening of Monetary Authority of Singapore’s (MAS) monetary policy thrice so far in the first seven months of the year. BDCB’s inflation forecast for 2022 is expected to be in the range of two to three per cent.
The BDCB recorded a growth in the financial sector total assets of 7.9 per cent year-on-year with total asset value of BND23.9 billion as of the first quarter (Q1) of 2022.
According to the BDCB’s first semi-annual policy statement published yesterday, the Islamic finance sector held 58 per cent with BND13.9 billion, while deposit-taking institutions made up 92 per cent of the total financial sector assets with an asset base of BND22 billion.
In its policy statement, BDCB noted that the International Monetary Fund (IMF) has revised down its 2022 global growth forecast from 4.4 to 3.6 per cent due to spillover effects from Russia’s invasion of Ukraine, such as supply shocks and higher inflation. Meanwhile, the domestic economy contracted by 1.6 per cent in 2021.
The banking industry continues to have a robust capital position with an aggregate Capital Adequacy Ratio of 20.9 per cent as of Q1 2022.
Nevertheless, due to heightened uncertainties associated with the COVID-19 pandemic, as well as the still relatively low global interest/profit rates environment, profitability of the banking industry has also declined.
The temporary regulatory flexibility to banks and finance companies has ceased after June 30, with the COVID-19 restrictions being lifted with businesses and individuals starting to recover from the impact of the pandemic.
Meanwhile, the waiver of fees and charges (excluding third party charges) for online local interbank fund transfers via the real-time gross settlement (RTGS) system and automated clearing house (ACF) has been extended until December 31.
To further ensure that critical infrastructure of the financial sector meets international standards, BDCB issued Guidelines on Technology Risk Management and Guidelines on IT Third Party Risk Management to all financial institutions, in line with the Financial Sector Blueprint’s (2016-2025) strategic goal under Pillar III.
BDCB also issued a notice on Academic Qualification and Work Experience Requirement for Capital Markets Services Representative’s Licence (CMSRL) to improve the level of professionalism within the financial sector, and notice on application process and requirements of investment-linked insurance business for insurance companies to enhance the governance of this business undertaking.
The full version of BDCB policy statement 1/2022 can be found on BDCB’s website at www.bdcb.gov.bn.