ARTICLE 4 AGREEMENT ON PRINCIPLES 1. In order to achieve the objectives set out in Article 2 and foster harmonisation in the legal and operational frameworks, the Central Banks shall, in their respective State Parties, work towards the realisation and attainment of the principles set out in this Article. 2. Principles for convergent status: 3. (a) State Parties shall move towards the adoption of price stability as the primary objective of their central banks; (b) Central Banks shall contribute to the pursuit of financial stability; (c) the accounts of Central Banks shall be audited by independent auditors appointed by the Board/shareholders of each Central Bank; (d) the objectives, legal form and capacity, duties, powers and functions of the Central Banks shall be set out in clear terms and as exhaustively as possible in the Central Bank legislation; (e) lending by Central Banks to government, its agencies and political subdivisions shall be discouraged; (f) unrealised exchange losses or gains in each financial year shall be made good, as agreed between the government and the Central Bank, within the following year in order to facilitate the orderly execution of monetary and exchange rate policies; and (g) overdue government securities and other indebtedness of government and its various agencies shall, at the end of each financial year, be first redeemed from any available surplus income before the transfer of the residue to government. Principles for operational independence: (a) There should exist legislative provisions ensuring the operational independence of Central Banks and the ownership structures of Central Banks should not be permitted to compromise this independence; (b) the formulation and implementation of monetary policy by Central Banks shall be recognised and explicitly provided for in the Central Bank statute; (c) the budget of each Central Bank shall be approved by its own Board; 58 ---------------------------------------------------------------------------------