Monetary Policy

This section presents the objective of the monetary policy of the Principality of Seborga and the main tools to implement it, namely the inflation control target and the floating exchange rate. In addition, it describes the functioning of monetary policy, explains the decision-making process and proposes related information documents.

The Central Bank of the Principality of Seborga implements its monetary policy through:

  • the setting of the key rate;
  • the determination of the reserve requirement levels that each bank of a country or currency area has to make on its account at the central bank;
  • open market operations which consist of the central bank intervening in the money market to buy or sell securities against central money. Through this procedure, the central bank seeks to modify, downward or upward, the money market rate.
  • interventions in the foreign exchange market and management of gold reserves.

The objectives of the BCPS monetary policy are set by its statutes. These statutes include, in addition to price stability, other objectives, such as full employment, stable prices and low long-term interest rates.