Honduras Regulatory Requirements for Banks: A Key to Institutional Stability
The Central Bank of Honduras plays a vital role in maintaining the stability of the banking system, ensuring the internal and external value of the national currency, and facilitating the smooth functioning of the payment system. To achieve this objective, the Bank’s Board formulates, develops, and implements monetary, credit, and exchange policies.
Monetary Policy Framework
The Central Bank is required to establish policy guidelines in areas identified by law, based on a comprehensive analysis of internal and external economic conditions. This involves:
- Economic Indicators: Analysis of indicators generated by various dependencies of the Bank
- Future Trends: Assessment of future trends and their effect on the national currency
Committee of Open Market Operations (COMA)
The COMA monitors and implements monetary policy guidelines, meeting at least eight times a year to analyze macroeconomic variables and market behavior. Based on this analysis, COMA may bring proposals to the attention of the Board regarding monetary policy and its implementation mechanisms.
- Monetary Policy Instruments: Open Market Operations and the Monetary Policy Rate
- Objectives: Achieve long-term inflation and moderate interest rates to maintain the internal and external value of the national currency
Transparency and Communication
COMA seeks to disseminate and explain its policy recommendations in a clear and transparent manner, facilitating informed decision-making by households and businesses.
Risk Management and Economic Growth
In making recommendations on monetary policy, COMA takes into account economic and financial developments from internal and external sources, as well as their effect on employment and economic activity. The Committee also considers the risks that may affect the financial system and the national payments system.
- Economic Objectives: Reduce deviations of inflation from the objectives set out in the Monetary Program
- Social Economic Growth and Employment: Promote social economic growth and employment while maintaining a balance between these objectives