São Tomé and Príncipe - Banking and securities
The Banco Nacional de São Tomé e Príncipe is the central bank and also handles commercial banking. The Caixa de Crédito is a government savings and loan institution serving industry, agriculture, and housing. There is also a postal savings bank. There is no stock exchange.
In mid-February 1997, the central bank announced it would circulate new banknotes and coins worth $29 million during the second quarter of 1997, with higher denominations. The new money has become necessary due to persistent high inflation. Inflation reached 20% in 1998. In 1999, several senior central bank officials were dismissed in connection with the embezzlement of $1 million. The bank governor himself was dismissed on suspicion of corruption, and a government investigation of the bank led to the resignation of a finance minister.
The International Monetary Fund reports that in 2001, currency and demand deposits—an aggregate commonly known as M1—were equal to $10.8 million. In that same year, M2—an aggregate equal to M1 plus savings deposits, small time deposits, and money market mutual funds—was $17.8 million. The discount rate, the interest rate at which the central bank lends to financial institutions in the short term, was 15.5%.