In August 1993, new legislation for the Bank of Cape Verde was approved, allowing the bank to exclusively exercise the role of central bank and assigning the entity increased responsibilities in supervising and controlling the various institutions that are active in the monetary and financial markets, including the insurance sector and the capital markets.
The Bank of Cape Verde's mission and principal assignment is to ensure and maintain price stability. Consistent with this principal objective, a secondary objective of the Bank is to promote liquidity, solvency, and the proper functioning of a financial system based on market stability.
The Bank of Cape Verde shall also perform the following additional functions:
• Collaborate with the government in defining monetary and exchange rate policies in order to achieve and maintain price stability;
• Independently execute monetary and exchange rate policies in Cape Verde;
• Secure and manage the country’s official foreign exchange reserves and act as an intermediary in the State’s international monetary relations; and
• Advise the Government on financial matters.
In implementing monetary and exchange rate policy, the Bank must also guide and oversee the monetary, financial, and foreign exchange markets, and shall, among other things:
• Regulate the operation of the monetary, financial and foreign exchange markets, adopting generic actions or intervening, where necessary, to guarantee the enforcement of economic policy objectives, particularly with regard to the evolution of interest and exchange rates;
• Supervise credit and banking institutions, including issuing directives to secure centralization services for credit risks;
• Supervise insurance, reinsurance, insurance brokerage, pension funds and other related or complementary activities.
The Bank of Cape Verde must directly ensure or regulate, oversee, and promote the smooth functioning of compensation and payment systems.
The Bank is responsible for centralizing and preparing monetary, financial, foreign exchange, and balance of payments statistics, and may require any public or private entity to provide the information necessary to fulfill this function.
The Bank of Cape Verde is the country's foreign exchange authority, and shall in that capacity:
• Supervise and monitor external payments, defining the governing principles for operations in gold and foreign exchange and authorizing foreign payments that require these operations;
• Enter into compensation and payment agreements, or any other type of contract with the same purposes, with similar public or private entities located abroad, whether on its own behalf or on behalf of the State of Cape Verde.