Rundheersing Bheenick: Main developments in 2011 and Mauritius's
economic outlook for 2012
Letter by Mr Rundheersing Bheenick, Governor of the Bank of Mauritius, to stakeholders,
Bank of Mauritius, Port Louis, 14 February 2012.
The original speech, which contains various links to the documents mentioned, can be found on the Bank of
Mauritius' website (http://bom.intnet.mu).
* * *
With the crisis in its fifth year since "sub-prime" became part of the international jargon, one
could have been excused for thinking along the lines of Murphy that everything that could
conceivably have gone wrong had already gone wrong and that 2011 was, at worst, going to
be more of the same as we'd seen it all before or, quite possibly, turn out to be somewhat
better since all manner of weaponry had already been deployed to take on the hydra-headed
beast as it successively morphed from a US sub-prime crisis to a US banking crisis to a
full-blown global financial crisis before emerging in its latest and most pernicious and
destructive avatar as the worst global economic crisis in eight decades and, surely, this
impressive arsenal - much of it never tried before on this scale - would at last begin to get
the better of the beast. But, it was not to be.
2011 turned out to be the stuff of nightmares. A Hollywood mogul contemplating an
economic disaster movie would have fired any script-writer who would have dared to come
up with such improbable plots and sub-plots as these, in no particular order, as part of the
global economic crisis storyline: a nuclear disaster in the third largest economy; a tsunami
engulfing South-East Asia; large universal banks tumbling like the proverbial house of cards,
scrambling for capital, losing their CEO's and their prime rating; an acute sovereign debt
crisis in the European periphery,, threatening contagion to the rest of the eurozone; a credit
crunch in the midst of unprecedented Quantitative Easing; nationalisation of banks
de facto
in hard-core capitalist economies; a sex-scandal forcing the exit of the head of the
International Monetary Fund (IMF); democratically-elected leaders being replaced by
appointed technocrats in Greece and Italy, under the pressure of markets; the US caught in
fiscal gridlock and losing its triple-A rating; an uprising in the Arab world,, toppling
long-established dictators with a key role in the politics of oil; the death of a tinpot dictator in
North Korea; the spectre of an unpredictable Iran joining the nuclear club; currency and
capital markets in the doldrums but with nervous twitches as they see-saw between risk-on
and risk-off modes; gold bugs having a field day - Goldfinger's dream of world domination at
last coming true? - as even the respected World Bank President re-discovers the merit of a
gold-exchange standard to combat exhorbitant currency volatility; the euro doing very poorly
with the prospect of its implosion leading to an explosion of summitry, but with sophistry
more in evidence than solutions - all this, and more, against a back-drop, at the global level,
of the world trade system still pursuing the elusive closure of the Doha round and, at the local
level in many countries, an amorphous "occupy" movement gathering momentum to vent its
frustration against all manner of crisis-related ills, real or imagined. Fact was indeed stranger
than fiction.
Our unfortunate script-writer would, in all likelihood, have been black-listed forever for
bringing Hollywood and the guild of screenwriters in disrepute if he had also had the temerity
to include in his screenplay of global financial and economic mayhem affecting the major
countries and their systemically-important institutions a tableau with a starkly contrasting
narrative: a tiny ultra-peripheral economy with a population of just 1.3 million; a fruit-salad of
a nation with a rich diversity of languages, religions and ethnicities, and democratic to a fault;
a success story of: structural adjustment, demographic transition, diversification
sans pareil
away from mono-crop dependence on sugar, export-driven industrialisation, off-shoring from
banking and finance to business processes, and of economic transformation generally as it
weaned itself away from trade-preferences to the post-WTO world; an economy that has kept
growing the crisis when bigger economies contracted; an unemployment rate that
throughout
has stayed below 8 per cent; an inflation rate that has tumbled from 10.9 per cent in April
2007 - the date of the establishment of the Monetary Policy Committee - to a historical low
of 0.1 per cent in October 2009, to reach 4.8 per cent in December 2011; a total public debt
of less than 60 per cent of GDP, much of it owed domestically with the balance held by
multinational or national financial institutions, not commercial banks; a rising level of net
international reserves from Rs85.8 bn in 2007 to Rs109.6 bn in 2011; a fiscal deficit of
3.2 per cent in 2011; gross FDI inflows of Rs10 bn in 2011, not far below the record level of
2010; a record profitability posted by the largest bank in the country, a domestic one that has
been in business since 1838; and a free floating currency that has adjusted flexibly without
the benefit of any controls to appreciate during the crisis with the exchange rate index, MERI
standing at 91.6 in December 2011 from its base of 100 in calendar year 2007.
1,
Such a tableau, as it seems, is not the fruit of the imagination of our
invraisemblable
hypothetical script-writer. The country depicted does exist. And the experience highlighted is
the result of the patient and combined efforts of policy-makers, real sector operators and its
people generally, as they strived to adapt and re-adapt to the continuously-changing external
environment confronting them. The picture that is painted is that of Mauritius: vibrant,
resilient, and resolutely moving forward. And the Bank of Mauritius, that I have had the
privilege of leading, has contributed to the rich palette that comprises the policy landscape,
especially the financial and monetary aspects, adding our own touches and flourishes as we
proceeded.
In keeping with past practice, I next highlight the main developments of the past year before
concluding with my perspective on the current year. Links are provided at the end of the
relevant paragraphs for those readers who may be interested in delving in greater detail into
some of the issues discussed.
The Mauritian economy continued to display a creditable degree of resilience
Economy
despite difficult external conditions. Growth momentum was maintained in 2011 at 4.1 per
cent, not far below trend, and projected to be slightly below 4 per cent in 2012. The
unemployment rate was fairly stable at 7.9 per cent, a far cry from the rising joblessness in
our main export markets. The fallout from the euro crisis will continue to affect our
euro-centric economy. The call that we launched two years ago to diversify production and
find alternative markets, which then fell on deaf ears, is increasingly finding a favourable
echo among real-sector operators and decision-makers.
(More on this issue)
Our monetary policy, continuously decried by business lobbies and
Monetary Policy
regularly denounced by the press with an eye, no doubt, on their advertisers, confounded its
critics by measuring up to its primary task of bridling inflation. At the beginning of the year,
we had anticipated that higher commodity prices would drive up headline inflation but it
would decline by end-2011. The Monetary Policy Committee (MPC) raised the Key Repo
Rate (KRR) at two successive quarterly meetings in March and June by 50 and 25 basis
points, respectively. These hikes contributed to contain inflationary pressures. At the
September meeting, although inflation expectations were still high, the MPC maintained its
stance as the global economy recovery was showing signs of losing momentum. In
December, as the euro sovereign debt crisis had intensified causing the domestic economic
outlook to be clouded by still greater uncertainty, the MPC proceeded to a very small cut of
10 basis points, the first time that the KRR was moved by less than 25 basis points, to
5.40 per cent per annum to manifest its concern about the low level of business and
consumer confidence while avoiding undue risks on the inflation front. Headline inflation rose
from 3.3 per cent in January to 6.6 per cent in November before declining to 6.5 per cent in
December. Barring unforeseen shocks, we expect both year-on-year and headline inflation to
moderate this year and gradually move within a narrowing range around our comfort level of
4-6 per cent.
(More on this issue)
I had explained on several occasions the rationale for a thorough review
Review
of the MPC
of the functioning of the MPC in the light of its operating experience of four years. This was
entrusted to Sir Alan Budd, a former Member of the Bank of England MPC. He made a
number of recommendations in his Report which, I am glad to note, supported my own line of
thinking. We have taken some decisive steps to enhance the independence and
transparency of the MPC: beginning with the 4Q 2011 MPC meeting, the minutes of MPC
meetings and the pattern of individual votes are being published; and there were legislative
changes in December 2011 to sever the remaining formal links with the Board of Directors of
the Bank.
(More on this issue)
We addressed the issue of excess liquidity
Financial and Money Market Developments
which could have fuelled inflationary pressures by a judicious combination of two measures.
First, we raised the Cash Reserve Ratio from 6.0 to 7.0 per cent in February 2011 and
increased the minimum daily cash ratio from 4.5 per cent to 5.0 per cent. Second, we
stepped up the issuance of BoM paper to nearly Rs10 billion. To cope with persistent
problems of liquidity overhang in different parts of the maturity spectrum, we extended the
tenor of our paper well beyond the usual maturity of Central Bank paper of up to one year,
and continued with the practice of issuing BoM Notes with maturities of 2, 3 and 4 years,
which we started in August 2010. The operation was successful and was favourably
commented by the January 2012 Article IV Consultation Mission of the IMF.
(More on this
issue)
Another interesting development in the money market that occurred during the year is the
daily publication of the Port Louis Interbank Offered Rate (PLIBOR) as from
26 August 2011 on the Reuters page at 12 00 hours. The PLIBOR, which is an average
interbank rate, is computed and published for four tenors, namely Overnight, One Week, One
Month and Three Months. These rates will be also available on the Bank's website in early
2012.
(More on this issue)
The tumultuous conditions prevailing in international
Domestic Foreign Exchange Market
currency markets prompted us to take steps to prevent contagion from seeping into our
small, but completely open, domestic foreign exchange market. The Bank intervened actively
to smooth out excessive rupee volatility - while taking extra care to remain broadly neutral
and avoid any unnecessary and dangerous balance-sheet risks - with total foreign currency
purchases equivalent to US$533 million nearly matched by foreign currency sales equivalent
to US$512 million. We continued to provide the State Trading Corporation, at their request,
with their foreign exchange requirements to pay for food and fuel imports. We maintained the
foreign currency swap facility, introduced at the beginning of the crisis in December 2009.
We, however, decided to withdraw the Special Foreign Currency Line of Credit that had been
made available to banks for trade financing since December 2008. I am pleased to note that,
as a result of our vigilance, liquidity conditions on the foreign exchange market stayed
comfortable throughout 2011, with a roughly similar total turnover of foreign exchange
transactions as the previous year, and the rupee behaved fairly well during the year,
contributing enormously to maintain price stability and real incomes in our import-dependent
island.
(More on this issue)
Given "negative carry," we did not seek to accumulate reserves. We
Reserves Management
managed to keep them at a comfortable level throughout the year. In December 2011, the
gross external reserves of the Bank exceeded Rs80 billion while net international reserves
amounted to almost Rs110 billion, representing around 37 weeks of imports. Our gold
holdings amounted to around Rs5.7 billion as at end-December 2011, or around 7 per cent of
gross external reserves. Our reserves are at a comfortable level when measured against the
two traditional metrics of import cover and short-term debt cover.
We actively pursued our diversification strategy into higher-yielding instruments and
comparatively stable currencies. We thus invested in currencies such as the Norwegian
Krone and the Swedish Krone. We intend to increase the share of our investment in
fixed-income securities. Amendments have been brought to the Bank of Mauritius Act to
support these moves. The Bank has negotiated with the Reserve Bank of India to invest in
Indian government bonds and is currently negotiating with the People's Bank of China to
invest in Chinese government bonds. The diversification strategy adopted by the Bank,
together with enhanced operational efficiency, were behind the improved financial
performance of the Bank which realized a net profit of Rs258 million for the FY2010/11,
compared to Rs72 million for the corresponding period last year, in spite of the continuation
of the low-yield environment for currency placements.
We have made some progress with the idea of setting up the Sovereign Wealth Fund which
I had discussed quite lengthily in my previous Letter to Stakeholders. I have had follow-up
discussions with the IMF and other central banks which have gone down this road. Together
with my Head of Financial Markets Operations, I participated in the first Africa Sovereign
Funds Roundtable in Morocco, which brought together central banks, pension/social security
funds, sovereign wealth funds and finance ministries across the African continent. The
Roundtable provided participants with guidance on ways to address strategic, governance
and investment management challenges.
We scored some success in our attempt to improve the domestic debt
Debt Management
profile of central government which we lengthened. In October 2011, we introduced 273-day
Treasury Bills to widen the maturity spectrum of available instruments and smoothe the yield
curve - I will take up the issue of the yield curve in the next paragraph. We built benchmark
bonds by re-opening the issues of longer-term Government instruments several times during
the year to stimulate the secondary market and establish a reference yield. In November
2011, we revamped the auctioning process by conducting single-maturity auctions of
Treasury Bills and holding more frequent auctions during the week. This was facilitated by
the implementation of a web-based on-line auctioning system now in its final stage. We are
planning to extend the system, which now handles only Treasury Bills, to other Government
debt instruments.
(More on this issue)
The year also brought a major development in the capital market with the
Yield Curve
correction of the yield curve. This curve - which shows the yields of Government securities of
different tenors - had been relatively distorted at its shorter end since 2007 and was stressed
downwards by factors such as the excess liquidity plaguing the banking system and the
decrease in the KRR. I have detailed earlier the measures which we took to bring liquidity to
reasonable levels. These helped to reduce the pressure on yields which started to move
upwards, thereby removing the distortions at the shorter end of the curve. By the end of
2011, we had achieved a smooth upward-sloping yield curve. This smooth yield curve is
expected, among other things, to benefit the development of a corporate bond market by
enabling market participants to price their financial products.
One of the obstacles to the proper development of a
Development of a Secondary Market
secondary market is the tendency for banks to hold their portfolio of Government securities to
maturity. The marked preference of banks for official paper, even at the cost of driving down
yields in the preferred part of the spectrum, and a growing risk-aversion which impeded the
growth of credit prompted us to introduce a new tool in the form of a cap on banks' holdings
of Treasury Bills in their banking books. This cap was initially set at 20 per cent of daily
average rupee deposits and tightened further to 18 per cent as from July 2011. There is no
limit on banks' holdings of Treasury Bills in their trading book. This is expected to encourage
banks to direct loanable funds towards extending more credit and also promote the
long-awaited development of the secondary market.
(More on this issue)
Our banking sector continued to show remarkable resilience
Banking Sector Performance
- in some cases, insolently so - in the midst of the global financial meltdown. As at
30 September 2011, unaudited figures show that banks realised profit after tax of
Rs15.9 billion against Rs10.1 billion a year earlier. The banking sector continued to expand
driven by the Segment A, i.e. domestic, business, while Segment B business contracted
slightly. The ratio of non-performing loans to total loans hovered around 2 per cent.
(More on
this issue)
Fee income is now a non-negligible component of banks' total income and there have been
complaints from various quarters that bank charges are on the high side. We decided to set
up a Working Group on fees, charges and commissions to study the reasonableness of bank
charges relative to the services offered. The Working Group's main task will be to analyse
banks' pricing for their services, particularly with regard to basic banking services offered to
the public. I reminded bankers at the last Banking Committee meeting of the year that the
Bank is fully empowered to regulate fees and charges in the banking sector. Moves in this
direction can be envisaged to ensure that customers get a fair deal.
We amended several of our guidelines and issued new ones
Regulation and Supervision
in response to the changing financial environment. We adopted the risk-based approach to
supervision by an optimum allocation of our supervisory resources to institutions that we
believe pose greater risks to the financial and economic system. We fine-tuned the
implementation of the Basel II framework by requiring banks to submit their Internal Capital
Adequacy Assessment Process and prepared ourselves to move to the Basel III framework.
(More on this issue)
We firmly believe that transparency builds confidence in the integrity of the banking system.
In April this year, after preliminary work spanning over two years, we took the bold step of
publishing our CAMEL ratings of banks. At first, this initiative did not appeal to our bankers,
but it favourably impressed the IMF Article IV Consultation Mission of January 2012, which
did not hesitate to qualify it as a in Africa. Today, the half-yearly publication of the
première
CAMEL ratings seems to have been widely accepted in the country and forms an integral
part of our framework for the public disclosure of information on the banking sector.
We pursued our efforts to enhance supervisory cooperation and information-sharing with
other countries. The Bank entered into Memoranda of Understanding (MoUs) with the
Central Bank of Kenya and the Maldives Monetary Authority, which brings the number of
MoUs signed with foreign regulatory bodies and agencies to ten. The Bank and the Central
Bank of Kenya are setting up a protocol for joint co-ordination and conduct of on-site
examination of financial institutions - which will come in handy as Mauritian and Kenyan
entities have interests in the banking sector in one another's country. We have established a
framework for regular exchange of information at mutually agreed intervals with foreign
"home" regulators for an effective supervisory oversight of international banking groups
operating in Mauritius, and participated in the work of the related supervisory colleges.
March 31, 2011, marked another milestone in the development of our
Islamic Finance
banking sector with our very first full-fledged Islamic bank, Century Banking Corporation,
launching its operations.
We are actively pursuing discussions with the International Islamic Liquidity Management
Corporation, of which we are a founder-member, for the issuance of Islamic liquidity
instruments that would mark our entry in Islamic capital markets, facilitate liquidity
management by domestic banks conducting Islamic banking business, and enhance our
attractiveness for Islamic finance. A Joint Committee of the Bank of Mauritius and the
Ministry of Finance and Economic Development has been set up to study all issues relating
to Islamic capital markets and, in particular, assess prospects for the issuance of Sovereign
Sukuks.
Less than a month after the Minister of
Small and Medium Enterprises Financing Scheme
Finance announced the creation of a Small and Medium Enterprises (SMEs) Development
Fund in the Budget presented in November 2011, we acted promptly to set up the "Small and
Medium Enterprises Financing Scheme" to facilitate access of SMEs to finance. Under the
Scheme, the 14 participant banks - i.e. all the banks involved in Segment A activity - will
provide credit facilities to SMEs at 3 percentage points above the prevailing KRR in an
amount of up to Rs3 billion over the next three years. Over the period December 2011 to
November 2012, funds of Rs1 billion will be disbursed to SMEs. Loans under the scheme are
free of the processing costs and charges normally applied to such lending. They also carry a
partial guarantee extended by a participating state-owned enterprise. The Bank is closely
monitoring all funding provided under the scheme to ensure its smooth operation.
(More on
this issue)
We made some progress on the Deposit Insurance Scheme in
Deposit Insurance Scheme
consultation with selected member banks of the Mauritius Bankers Association. We have
approached the Swiss-based International Association of Deposit Insurers, of which
Mauritius is an Associate-member, for their expert views and comments on the proposed
Scheme. It is our fervent hope that we will be able to plug in an additional safety-net in our
banking regulatory/supervisory infrastructure and minimise the risks now being implicitly
underwritten by the monetary and fiscal authorities.
The twin-peaks regulation model has been listed among the
Single Financial Regulator
possible suspects responsible for the financial and banking crisis in some jurisdictions. An
important policy development was the announcement in the November 2010 Budget Speech
of the possible move to a single regulator for all financial services in our jurisdiction. This will
most certainly impact on the way the Bank currently functions. A team of experts of
international repute has been identified to undertake a study on the way forward.
Since its launch in 2005, the Mauritius Credit
Mauritius Credit Information Bureau
Information Bureau (MCIB) has rapidly emerged as an essential decision-making tool for
system participants to assess any prospective borrower's credit profile. The credit
information system also provides reputational collateral to borrowers such as SMEs and
small borrowers who often face difficulties in accessing finance due to lack of tangible
collateral. An important amendment was brought to the Bank of Mauritius Act in
uly 2011 empowering the Bank to impose sanctions on credit providers who refuse to join the
MCIB. Another amendment enabled the Bank to become a participant of the system which
the Bank formally joined in January 2012. Lenders are encouraged to share the benefits
derived from the MCIB with borrowers by reducing processing fees, charges and lending
rates.
(More on this issue)
In my last letter, I had regretted my inability to deliver on the
Cheque Truncation System
Cheque Truncation System (CTS) which had got entangled in procedural difficulties. This
year, we took bold steps to steer this long-delayed project in the right direction. Amidst
unfounded criticisms and baseless allegations of fraud and malpractice, the new system was
set up in collaboration with commercial banks. On 6 September 2011, Dr the Honourable
Navinchandra Ramgoolam, GCSK, FRCP, Prime Minister, Minister of Defence, Home Affairs
and External Communications, came to the Bank to launch the CTS in the presence,
amongst others, of the Honourable CG Xavier-Luc Duval GCSK, Vice Prime Minister and
Minister of Finance and Economic Development, and the CEO's of all banks operating in
Mauritius. We chose to mark the occasion by donating a cheque of Rs1 million to the Prime
Minister's Relief Fund, with this Bank of Mauritius cheque being the first to be cleared by the
CTS.
The deployment of this new system which provides for the Bulk Clearing System for
low-value electronic transactions marks the beginning of a new era for the payment and
settlement system of the country. Cheque clearing is now faster and more secure. During the
course of 2012, we will interface the system with the national switch, which we are now
working on, to cater for the effective clearing of card-based transactions from ATMs and
points-of-sales.
With the CTS having been the object of so much unwarranted attack, I feel it my duty to
provide assurance to all stakeholders that the Bank has acted in all fairness and legality as
well as in the best interests of the entire community of cheque-users, and bank customers
generally, in this matter. Technology never stands still and it is in the nature of competitive
bids that many of them fail to win the contract.
I have made regular dialogue with our stakeholders an integral
Dialogue with Stakeholders
feature of my governorship. It is my strong belief that there cannot be effective policymaking
in central banks without effective communication and outreach. During the year, I continued
with my open-door policy of meeting people from different walks of life and different areas of
activity, from academia to private sector operators, and consumer associations. This allowed
me to feel the pulse of the economy and fill gaps in the Bank's staff reports, while also being
sensitive to all shades of opinion, including those that rarely make the headlines in the local
press.
In addition to our regular schedule of quarterly meetings with the banking sector through the
Banking Committee, I also held meetings with the MBA Bureau, an offshoot of the Banking
Committee, to address the most pressing issues. We held a grand total of 49 trilateral
meetings with CEO's and Board Directors of banks and other deposit-taking institutions as
well as with their external auditors to review their financial performance and to discuss
regulatory issues. I personally chaired the meetings with the larger, systemically-important,
institutions. My First Deputy Governor handled the rest but briefed me on the issues to be
addressed prior to the meetings, and on the outcomes and any concerns thereafter.
The Bank's traditional Annual Dinner in honour of Economic Operators was marked this year
by the presence of HE Mallam Sanusi Lamido Sanusi, Governor of the Central Bank of
Nigeria, as our Guest of Honour. This annual event gave me the opportunity to express my
appreciation to our stakeholders for the cordial working relations that we have had during the
year. It allowed me to comment on the past year and to highlight future areas of concern for
the regulator. The function, which was the first black-tie event ever organised by the Bank,
turned out to be a runaway success.
As part of our open and transparent communication strategy, I accepted invitations to speak
from various institutions, at home and abroad. I began the year with a keynote address at the
Future of Financial Markets Forum in Mumbai in January. I continued with an address at the
SAID Business School at the University of Oxford in February. I delivered a dozen addresses
to share my views on a wide range of topics, from economic analysis and supervisory
matters to payment system infrastructure and corporate governance, on Mauritius and on
Africa. There were two common threads in my addresses: overseas, the main thrust was to
present Mauritius as an banking and financial centre at the cutting edge of
avant-garde
monetary policy-making and banking/financial regulation; locally, I highlighted the need to
deliver on our core mandate. I did not elude the burning issue of exchange rate management
when invited to speak at a Round Table on the exchange rate organised by the Mauritius
Exports Association. It was the opportunity for me to underline the essential fact that our
much-maligned monetary policy/exchange rate strategy has delivered the goods for the
nation as a whole and done it in a more sustainable manner than the previous infernal spiral
which banked on continued depreciation...which fuelled inflation...which sparked wage
demands...which stoked up inflationary pressure...which necessitated further depreciation
etc.
(More on this issue)
Since I joined the Bank, I have integrated Corporate
Corporate Social Responsibility
Social Responsibility as a key element of the Bank's outreach to the wider Mauritian
community to project a less technocratic and austere image. The Bank of Mauritius
Inter-Club Youth Championships - now a regular feature in the Bank's calendar of
activities - were held for the fifth consecutive year on 24-25 September 2011. This fifth
edition was co-sponsored by 14 commercial banks - namely ABC Banking Corporation,
Bank of Baroda, Bank One, Bank International Indonesia, Barclays Bank, Bramer Banking
Corporation, Deutsche Bank, Hong Kong and Shanghai Banking Corporation, Investec Bank,
Mauritius Post and Cooperative Bank, SBI (Mauritius), Standard Bank, Standard Chartered
Bank and State Bank of Mauritius. Around 725 athletes from 25 clubs participated, including
the 15 best athletes selected from 400 Rodriguans who participated in the Inter-Club/School
Youth Championships held in Rodrigues. A record number of national
records - 14 of them - were established this year.
We were proud to note that two athletes who first came to national attention at the Inter-Club
Youth Championships won bronze medals in the held in
"Indian Ocean Island Games 2011"
Seychelles. The Bank rewarded the record-setters as well as the two bronze medallists at a
prize-giving ceremony held at the Bank in December 2011, in the presence of their
parents/families, trainers, and national sport officials.
The Bank continues to play its role in the promotion of
Financial Literacy Programme
financial literacy. This year, the Bank launched a Financial Literacy-Essay Competition on
the theme 'The Importance of Saving for Youngsters', which was open to students of Forms
IV and V. We also organised the fifth edition of the "Monetary Policy Challenge" in June
2011. At the prize-giving ceremony held at the Bank in December 2011, the winners of both
competitions were rewarded, in the presence of parents, teachers and college rectors of the
winners.
(More on this issue)
As part of our outreach initiatives, we planned an internship
Internship Programme
programme but it took us some time to deliver on it. We first had to address very real
concerns about data confidentiality and secrecy before we tentatively introduced an
internship programme, limited to students of the University of Mauritius and the University of
Technology. Five interns were selected after an interview and posted in different divisions of
the Bank to acquire practical experience in Central Banking. The internship programme
covered the period July to September 2011. In 2012, we intend to broaden the programme to
accommodate interns from anywhere throughout the year.
We continued to provide up-to-date training to staff to better equip them for the
Training
challenges ahead. IMF technical assistance in the areas of macroeconomic modelling and
supervision was on-going. Training in these areas is expected to enhance skills and the
analytical capacity of Bank staff.
With the approval of the Minister of Finance, we doubled the Bank's
Capital of the Bank
capital from Rs1 billion to Rs2 billion in November 2011. This injection of capital was
rendered necessary on account of the significant increase in the volume of the Bank of
Mauritius Instruments which we had to issue to cope with excess liquidi