Burundi - Banking and securities
Until the DROC became independent in 1960, the monetary and banking systems of Ruanda-Urundi were integrated with those of the Congo. Thereafter, Ruanda-Urundi had its own monetary structure and central bank. Shortly after the UN-sponsored Addis Ababa conference of July 1962, Rwanda and Burundi entered into an economic agreement providing for a continuation of the monetary union. After the breakup of the economic union in December 1963, Burundi's banking operations were transacted through the Bank of the Kingdom of Burundi, which in 1967 became the Bank of the Republic of Burundi, the central bank and bank of issue. Burundi has a number of commercial banks, which handle a substantial portion of short-term credit (vital for the coffee season) that include the Commercial Bank of Burundi, the Credit Bank of Bujumbura, and the Belgian-African Bank of Burundi. There are also a savings bank, a postal savings bank, and a joint Libyan-Burundian financial institution. Other financial institutions are the National Economic Development Bank and the Central Fund for Mobilization and Finance.
The World Bank suspended all but three minor social-sector programs in late October 1996. A World Bank delegation visited Burundi in February 1997 to assess the situation, and concluded that conditions were not right for a resumption of funding. As a result of the deteriorating balance-of-payments situation, reserves were run down, from $209 million at the end of 1995 to $140 million in December 1996 and $108 million in 1998.
The International Monetary Fund reports that in 2001, currency and demand deposits—an aggregate commonly known as M1—were equal to $96.4 million. In that same year, M2—an aggregate equal to M1 plus savings deposits, small time deposits, and money market mutual funds—was $138.7 million. The discount rate, the interest rate at which the central bank lends to financial institutions in the short term, was 14%.