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HONIARA, Solomon Islands (January 6, 1999 - PACNEWS)---The Central Bank of Solomon Islands' substitute for the country's securities market, which collapsed in August 1995, is functioning well.

The securities market in government treasury bills for short-term investment and development bonds for long-term investment had collapsed following over-borrowing by the government and its inability to repay its arrears.

Central Bank Governor, Rick Hou, said the bank's own securities -- called Bokolo Bills -- were introduced following the collapse of the government's securities market.

This was aimed at providing an investment opportunity for those with savings.

Hou said although the Central Bank pays competitive interests on investments in its Bokolo Bills, it is basically the bank's monetary monitoring policy instrument and not a fundraising scheme for the Central Bank.

Deposits in the Central Bank securities, Hou said, are not for lending.

The main investors in the Central Bank securities are the commercial banks, which hold around 55 percent, the National Provident Fund with 24 percent, and another 21 percent held by the public and individuals with a minimum investment of US$ 250.

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