East Timor plans to set up own central bank next year

BASEL, Switzerland, June 23 (Reuters) - East Timor plans to set up its first national central bank next year, a senior finance official from the tiny former Portuguese colony said on Saturday.

Fernando da Silva Carvalho, chief accountant at the country's Banking and Payments Authority, told reporters of the plans at a meeting of the world's central bankers at the Bank for International Settlements in Basel, Switzerland.

East Timor has lacked a central bank since Indonesian occupation ended in 1999. The state was administered by the United Nations until 2002, and has suffered from fractious and violent politics since then.

Carvalho confirmed that plans for a fully fledged central bank were under way.

"We hope to have one by next year," he said.

Carvalho also estimated that the East Timorese economy, which is heavily reliant on oil revenues, was growing by about 6-7 percent a year.

"Economic growth is now like 6-7 percent. That is our estimation," he said. East Timor's economy grew by 1.5 percent in 2005, according to the U.S. Central Intelligence Agency's World Factbook.

But he bemoaned a lack of economic data which made it hard to judge inflation in the economy, which uses the U.S. dollar as its currency. Dollar weakness has pushed up inflation in other countries whose currencies are linked to the dollar.

East Timor has a population of around 1 million.

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