The Brunei Darussalam Central Bank (BDCB) plays a fundamental role in establishing a robust and stable financial and banking environment within the country. The central bank carries the responsibility of conducting the country’s monetary policy, issuing the Brunei currency, as well as regulating and supervising banks and other financial institutions.

According to the provisions of the BDCB Order 2010, the central bank’s primary objectives are multi-faceted. These include the pursuit and maintenance of domestic price stability, ensuring the stability of the domestic financial system through the implementation of financial regulations and prudential standards.

Additionally, BDCB is tasked with facilitating the establishment and functioning of efficient payment systems and overseeing their operations.

Among the central bank’s publications is the Business Sentiment Index (BSI) which measures the sentiment and confidence of businesses in Brunei. This monthly index covers various aspects including current and future business conditions; investments; employment of workers; and costs of running the businesses. The BSI serves as a leading macroeconomic indicator with its forward-looking element in the country.

A general overview of the real estate and property state in the country can also be determined through the publication of Brunei Darussalam’s Residential Property Price Index (RPPI), overseen and managed by the BDCB. The data is compiled and sourced from multiple banks in the country, published in cooperation with the Ministry of Development through the Authority for Building Control and Construction Industry.

By definition, RPPI measures the rates at which prices of private residential properties purchased by households are changing over time. The index identifies areas with the most demand in the property market as it also records where the most purchases of private residential properties are.

Meanwhile, the BDCB Centralised Statistical System (CSS) is an online portal with the function of collecting data from relevant stakeholders including financial institutions regulated by BDCB, such as banks, finance companies, insurance companies, takaful operators, Capital Markets Services Licence (CMSL) holders, money changers, money remittance companies and pawn brokers.

The data can be analysed and then used to produce insightful and detailed reports within BDCB. Stakeholders will be able to carry out their duties more efficiently and spend their time in analysing data more productively. BDCB is also responsible for the management and administration of Brunei Darussalam Government Sukuk Al-Ijarah issuances. In Islamic finance, one of the ways for market participants to raise capital is through the issuance of sukuk, Syariah-compliant financial products that create returns similar to fixed-income instruments, like bonds. However, sukuk does not collect interest.

In November 2023, BDCB announced the successful pricing of its 212th issuance of Sukuk Al-Ijarah securities. With this issuance, the Brunei Government has thus far issued BND16.58 billion worth of Sukuk Al-Ijarah securities since the maiden offering in 2006. The total holdings of the Brunei Government sukuk outstanding as at November 9, 2023 stood at BND339 million.

As part of the central bank’s commitment to the Brunei Darussalam Financial Sector Blueprint 2016-2025 which acts as a guide for the financial sector, BDCB introduced BDCB I-Bills in 2020. The BDCB I-Bills aims to support liquidity management for the banks and Perbadanan TAIB as primary market participants in the country. As of December 2023, BDCB issued BND3.830 billion worth of short-term BDCB I-Bills, and the total holdings of BDCB I-Bills stood at BND45 million.

In line with safeguarding Brunei’s financial system and interests of financial consumers, the BDCB Alert List compiles a list of individuals, companies and websites which are neither authorised nor approved under the relevant laws and regulations administered by BDCB or whose activities raise a suspicion of illegal financial activity. The list can be found on the BDCB website.

Cooperation in supervision

In February 2023, a memorandum of understanding (MoU) was signed between BDCB and the Monetary Authority of Singapore (MAS) to strengthen cooperation in the supervision of banking and insurance. The MoU facilitates effective supervision of banks and insurers operating in both jurisdictions, promoting information exchange and enabling cross-border on-site inspections. Beyond regulatory matters, the BDCB and MAS engaged in dialogue regarding recent economic and financial developments.

The two parties explored collaborative efforts in sustainable finance to address climate change in the ASEAN region and delved into advancements in Central Bank Digital Currencies and crossborder payments. The MoU not only marks a new chapter in the collaboration between BDCB and MAS, but also solidifies their longstanding relationship particularly in the realm of financial sector development and stability.

BDCB will continue to monitor and support the development of Brunei’s financial industry, and the domestic economy as a whole. Given the challenges in the global economy and potential stresses in financial markets, BDCB will also continuously review the adequacy of its regulatory and supervisory frameworks in ensuring a conducive environment for the financial services industry development as well as to safeguard the country’s monetary and financial stability.

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