Open Market Operations involve the purchase or sale of securities, such as Treasury bills or Bahamas Registered Stock, by the Central Bank in both the primary and secondary markets to bolster an efficiently functioning capital market.
The Central Bank is the Official Registrar and Transfer Agent of securities for the Government, the Bahamas Mortgage Corporation, the Bridge Authority, and the Clifton Heritage Authority. The Central Bank supports both a primary and secondary market for the Government's local currency securities, which at present includes Treasury bills and Registered Stock.
Treasury bills are predominately sold through a tender process for periods of 91 or 182 days in increments of B$100, and a minimum bid of B$500,000. The Central Bank also sells Treasury bills in the secondary market where non-competitive investors may be accommodated. Treasury bill proceeds provide short-term financing to the Government at a cost determined by the market.
Bahamas Registered Stocks (BRS), which are issued under The Public Debt Management Act, 2021, are long-term securities with maturities of up to 30 years. With a minimum investment of B$100, they are issued at par, in multiples of $100, and carry varying interest rates. The offers issued in any fiscal year are based on budgeted financing provisions authorised by resolution of the House of Assembly.
In the absence of an active secondary market in Treasury bills and Bahamas Registered Stock, the Central Bank provides liquidity to the market through the execution of trades at market-derived prices.
Primary and secondary market registration activities are also accommodated for the Bridge Authority's bonds. In the case of the Bahamas Mortgage Corporation, only primary activities have been undertaken; however, through its registrar function, the Central Bank is also able to facilitate secondary market trades between interested parties.
Open market operations are facilitated through the Central Bank's Banking Department.
