Rundheersing Bheenick: How does a small open economy faced with
unprecedented capital flows conduct monetary policy?
Talk delivered by Mr Rundheersing Bheenick, Governor of the Bank of Mauritius, at the
Reserve Bank of India, Mumbai, 14 March 2008.
* * *
It is a great honour and privilege for me to be invited by the Governor of the Reserve Bank of
India to address this distinguished audience at the seat of this august institution this morning.
Allow me to place on record my deep appreciation for the invitation extended to me by
Governor Reddy. I had the immense pleasure of welcoming him to Mauritius in December
last when he delivered a Memorial Lecture as part of the 40th Anniversary Celebrations of
the Bank of Mauritius. India and Mauritius have enjoyed a very special relationship spanning
over several centuries and cutting across vast swathes of human endeavour in the
economic, social, cultural, linguistic and political fields. I cannot think of anything that
symbolises this more eloquently than the plain simple fact that our currency - like its more
famous cousin issued by your institution - also goes under the name of "Rupee". But then a
central banker would say that, wouldn't he?
The theme of my talk today is: "How Does A Small Open Economy Faced With
Unprecedented Capital Flows Conduct Monetary Policy?" I believe this subject, or at least
some aspects of it, will be of interest to both the Bank of Mauritius and the Reserve Bank of
India in the context of current economic developments in our two countries against the
backdrop of the international economic environment confronting all of us.. The structure of
my talk today will be as follows: In the first part, I begin with a thumb-nail sketch of the
Mauritian economy to provide some context. In the second part of my presentation, I focus
on some of the important financial and economic reforms that Mauritius is now embarked
upon. The third part addresses some of the challenges emerging from globalization for a
small country. Finally, I touch upon the monetary policy challenges stemming from
unprecedented capital flows for a small open economy. This is a subject which is exercising
my mind considerably, causing sleepless nights and swallowing in large gulps the reserves
at my disposal as Governor of the Bank of Mauritius. You will discover that I have more
questions than answers.
Part I: General background on the Mauritian economy
As most of you are no doubt aware, Mauritius is a small island economy in the South-West
Indian Ocean. It has been independent since 12 March 1968 and became a Republic in
1992. A couple of days ago, we celebrated our 40th Anniversary as an independent nation. In
spite of several handicaps like limited natural resources, remoteness from major markets, a
small domestic market and vulnerability to cyclones and man-made external shocks alike,
Mauritius has achieved one of the highest per capita GDP in Africa. In 1968, Mauritius was,
by all measures, a poor country with per capita income of less than US$200. Prospects were
so gloomy that Nobel-prize-winning economist James Meade, who headed an Economic
Commission sent by the British colonial administration in the aftermath of one of the most
devastating cyclones in the country's recorded history, recommended emigration as a key
part of the solution to the island's problems. One of the first World Bank missions to visit the
country, led by Jean Baneth, opined "... this country exudes an air of hopelessness." Another
Nobel prize-winner, V.S Naipaul, titled an analytical piece on Mauritius "The Overcrowded
Barracoon." And a French writer followed suit with a book entitled "Maurice - Quelle
Independence?"
It will take me too long to take you down the road we have travelled over the last four
decades. I have been part of the journey, occasionally as an observer, but mostly as a doer,
a mover or "agent provocateur." Suffice it to say that the prophets of doom and gloom have
been proved utterly wrong, that the Malthusian nightmare has been exorcised, that Mauritius
is now the poster boy of the IMF and the World Bank when it comes to successful economic
development in Africa. By 2007, for a population of nearly 1.3 million, per capita GDP has
increased to nearly US$6,000. Real GDP has grown, on average, by about 5 per cent per
annum over the last two decades. For 2008, real GDP growth is estimated at 6 per cent, up
from 5.6 per cent in 2007. This has been one of the most remarkable policy-driven economic
transformations in modern history.
The Bank of Mauritius has played a key role in this economic transformation. The modalities
of conducting monetary policy in Mauritius have evolved from strong reliance on controls and
directives to more market-based mechanisms. The 1970's were turbulent years for the
conduct of monetary policy: external price shocks, together with expansionary domestic
policies, led to an acceleration of inflation to an all-time record of 42% in 1979. I played a key
role in devising, marketing and implementing appropriate adjustment policies as part of IMF-
and World-Bank-supported stabilization and structural adjustment programmes.
Macroeconomic stability was regained in the early 1980's and maintained successfully
thereafter. The monetary authorities pursued sound monetary and exchange rate policies,
which contributed to foster an environment favourable to sustained growth.
The Bank has, since its establishment in 1967, given prominence to the objectives of
diversifying the economy and fostering growth and employment through supportive actions.
Freshly liberated from the tight corset of the Currency Board system - and here, let me add
for those of you who do not know it, the Currency Board of Mauritius is the very first one of its
kind on record, just as Mauritius is also the first known customer for the noted banknote
printing company Thomas De La Rue - it was natural for the Bank of Mauritius to strike out in
new directions. An expansionary policy was followed by keeping interest rates low and
providing concessional credit to what were called "priority sectors". Concessional credit was
provided to industrial enterprises, which were being supported to promote growth,
diversification and employment. Export Processing Zone companies and manufacturing
companies were the targeted beneficiaries, along with the sugar sector which then
constituted the backbone of the economy.
As part of our colonial heritage, the Mauritian rupee was pegged to the Pound Sterling until
1976, when we gave up the link in the face of continued depreciation of the British currency.
We then achieved a world first by pegging our rupee to the IMF's Special Drawing Right,
which turned out to be an unmitigated disaster. In 1983, after a period of political and
economic turmoil, accompanied - if not caused - by currency devaluation, we moved from a
fixed to a managed exchange rate regime. Over the next few years, exchange rate policy
was aimed at protecting competitiveness, and the real effective exchange rate steadily
depreciated until 1987. As the net international reserves situation improved and became
more comfortable, policy aimed more at achieving a stable real effective exchange rate.
Exchange controls which were the bread and butter of the Bank of Mauritius at its creation
were gradually liberalized. In September 1993, Mauritius accepted the obligations of Article
VIII of the Articles of Agreement of the IMF and all current account transactions were
liberalized. Within a year we fully liberalized the capital account. An interbank foreign
exchange market was established with a greater role assigned to market forces in the
determination of the exchange value of the Mauritian rupee.
The long and the short of it is that Mauritius, which at independence was a monocrop
economy depending entirely on sugar, has over the intervening years diversified successfully
by adding such new pillars of economic activity as export manufacturing (mainly textiles),
tourism and financial services. Information and Communication Technology and the seafood
hub are two emerging sectors of the economy with very promising prospects for the future.
Part II: Financial and economic reforms
Today, Mauritius can boast of having a sound and dynamic financial system. The banking
industry is highly profitable, underpinned as it is by a sound regulatory framework and a
supportive monetary policy geared to macroeconomic stability. The entry of new banks, and
the expansion of the local and regional branch network of existing banks, has combined to
instil a new dynamism in the industry. We are in the final stages of rolling out Islamic banking
and financial services which, we believe, represent a new window of global business
opportunity for Mauritius. Since April 2007, a new era of monetary policy-making has also
dawned at the Central Bank with the establishment of an independent Monetary Policy
Committee, which comprises members from outside the country.
Let me add some comments on how, in the wake of the continued development and
increasing sophistication of the banking industry, the Bank of Mauritius has relentlessly
pursued its efforts to strengthen its supervisory arm. The regulatory framework was
reinforced with the promulgation of the Banking Act 2004 and the Bank of Mauritius Act
2004. From a regulatory perspective, the change in the licensing regime stemming from the
Banking Act 2004 has also contributed to the new dynamism which characterises the
banking sector. This legislation provided for the integration of domestic and offshore banking
business and eliminated the previous distinction between Category 1 "domestic" and
Category 2 "offshore" banks. Offshore banks had been generally perceived as being less
regulated and more prone to money-laundering and other illegal activities. The new
legislation served to dissipate such misapprehensions regarding the regulation of offshore
banks and has enhanced the image of our financial sector.
Under the single banking licence approach, banks are free to undertake the whole range of
banking business. According to the "Guideline on Segmental Reporting under a Single
Banking Licence Regime," issued by the Central Bank and which became effective in July
2005, banking business in the country is divided into two categories, Segment A and
Segment B. Segment B activities encompass banking business conducted essentially with
non-residents and Global-Business-Licence-holders. Segment B is thus essentially directed
to the provision of international financial services generating "foreign source income," which
is taxed under a special preferential regime. All other banking business is classified under
Segment A. This favourable tax treatment of foreign source income has acted as a catalyst in
the expansion of the regional and international banking business of banks. The unification of
the banking licence has subjected banks to increased competition in both Segments of their
activity. The challenge for banks which are now operating under the same single regime, is
to be innovative in order to be able to tap specific and niche markets, both locally and
overseas.
To give you a better picture of the monetary challenges confronting a small open economy
like Mauritius, I believe it would be useful if I dwell a little on the new framework for the
conduct of monetary policy that was introduced by the Bank in December 2006, that is just a
few weeks before I joined. Under this new framework, the Bank established a "corridor" that
would effectively provide a ceiling and a floor for overnight interbank interest rates. Effective
18 December 2006, when this framework was introduced, the Repo Rate was set at 8.50 per
cent. In order to manage the overnight interbank interest rate in an effective manner, the
Bank stated that it would supply, or absorb, liquidity against collateral at its discretion and in
whatever volume was required to hold the overnight interbank interest rates close to the
Repo Rate. The Bank initially established a "corridor" that was symmetrical around the Repo
Rate. Thus, the Bank was expected to lend money to banks at the ceiling of the "corridor"
which was set at 50 basis points above the Repo Rate. In a similar manner, the Bank was
expected to absorb excess funds at the floor of the "corridor" which was set at 50 basis
points below the Repo Rate. The ceiling and the floor of the "corridor" were expected to
move in the same direction, and with the same magnitude, as the changes in the Repo Rate.
Currently, the Repo Rate stands at 9.00 per cent.
The experience so far with the new monetary policy framework has been a mixed one. While
banks' deposit and lending interest rates have generally moved in tandem with changes in
the key Repo Rate, market interest rates at the short-end of the yield curve have tended to
move away from the key Repo Rate. This has been particularly evident since last November.
This phenomenon has been caused by the excess liquidity on the interbank money market
and partly by the sizeable reduction in the primary issues of bills mainly by the Government
relative to maturing bills. The Central Bank's absence in the reverse repurchase market
reflected our concern not to mop up any "hot money" or money just transiting through
Segment B activities - which I detailed earlier. We attempted to address systemic excess
liquidity by introducing a Special Deposit Facility whereby banks were invited to place special
deposits with the Central bank for a period of 14 days at a rate of 125 basis points below the
key Repo Rate.
The "disconnect" between the key Repo Rate and short-term market interest rates is a
source of concern to us. The Bank is contemplating a widening of the corridor as the ± 50
basis points might be too narrow for a small open economy like ours which is vulnerable to
shocks and subject to volatility in international capital markets. We are also currently
debating internally whether the corridor should be "symmetric" or "asymmetric." Moreover,
there are issues relating to "discretionary" as opposed to "automatic" conduct of repurchase
operations by the Bank which need to be addressed. These technical issues have been
taken up with the recent IMF Article IV Mission that visited Mauritius during the last two
weeks. Obviously, we are looking for a solution that fits more comfortably with the Mauritian
situation, characterized as it is by a highly-concentrated banking structure.
Let me also make a point about our legal mandate. In terms of the Bank of Mauritius Act
2004, the primary object of the Bank is to maintain price stability and to promote orderly and
balanced economic development. In this respect, real sector issues are duly weighed up in
our monetary policy decision-making process. As part of our other objectives, we must also
ensure the stability and soundness of the financial system in Mauritius.
The process of fiscal adjustment in Mauritius has been set in a medium-term framework.
Corrective measures to address fiscal imbalances and restore fiscal discipline have been
initiated. The budget deficit, as a percentage of GDP at market prices, declined from 5.3 per
cent in Financial Year 2005-06 to an estimated 4.3 per cent in FY 2006-07. For the current
financial year, it is estimated at 3.8 per cent. I should perhaps also mention here that there is
a separation of debt management from monetary management. Government Securities are
issued only for purposes of financing the Government's borrowing requirement whereas
Bank of Mauritius Bills are issued for purposes of monetary management. The policy of
issuing central bank bills to mop up any excess liquidity thrown up by incoming foreign
exchange flows has a direct relevance to the main theme of this talk.
Faced as it is today with the triple shocks stemming from the erosion of trade preferences in
the sugar and textile sectors and the surge in oil prices on the international market, Mauritius
has no choice but to embark on bold structural reforms. This is precisely what we are doing.
Efforts at fiscal consolidation with a view to maintaining medium-term fiscal sustainability, the
achievement of a stable macroeconomic environment and the maintenance of social
consensus are some of the key ingredients for ensuring the success of these economic
reforms. The achievement of higher job-creating growth remains a central policy challenge
for Mauritius now and in the years ahead. To make any significant dent in the unemployment
rate, standing at around 8.8 per cent, Mauritius needs to move to a higher growth path of at
least 7 to 8 per cent per annum. In developing new growth poles, we must take care to
consolidate the existing pillars of the economy, a consideration not without implications for
the conduct of monetary policy.
The erosion of trade preferences for its main exports, coupled with the challenges stemming
from globalization, make it imperative for Mauritius to raise productivity and become globally
competitive. As the country shifts progressively toward a service-dominated and knowledge-
based economy, labour-market flexibility has become vital. The central wage-setting
framework that characterized the labour market since before independence allowed for little
wage moderation, did not favour wage differentiation across sectors and enterprises, and
focused more on job preservation than on job creation. The recent establishment of the
National Pay Council, which aims at broadening practices in wage agreements to reflect
better sector- and firm-specific conditions, represents a breakthrough in labour market
reform. It will enable us to link wage growth to productivity gains. This, together with the
implementation of the proposed changes in labour regulations, will give the much needed
flexibility in the labour market.
As regards the external accounts, the deficit on the current account represented 8.1 per cent
in FY 2006-07, compared to 5.2 per cent of GDP in FY 2005-06. This deterioration reflected
mostly the worsening merchandise account deficit which was itself due largely to the
purchase of two aircraft. This was however offset to some extent by the combined surpluses
on the services, income and current transfers accounts. If we exclude the purchase of
aircraft, the current account deficit for FY 2006-07 represented 5.0 per cent of GDP, or a
slight improvement on the preceding year. For the current fiscal year, the current account
deficit, including the purchase of aircraft, is estimated at 4.8 per cent.
Policy must now reckon with some evolving fundamentals emanating from the external
sector, particularly in the capital and financial account of the balance of payments. The
fundamentals of the balance of payments are no longer determined by the trade balance
alone. The overall balance of payments posted a surplus of Rs 6.6 billion in FY 2006-07 and
a surplus of Rs 13.5 billion in calendar year 2007, as against a deficit of Rs 4.6 billion in
calendar year 2006. Gross total tourist earnings amounted to Rs 40.7 billion in calendar year
2007, up from Rs 31.9 billion in 2006. Foreign Direct Investment (FDI) is estimated to have
reached an unprecedented peak of Rs 11 billion in 2007, up from Rs 7.2 billion in 2006.
FDI is growing rapidly in response to reform efforts, and there are good prospects for
attracting still more significant FDI flows to Mauritius in the medium term on account of the
numerous mega projects in both the public and private sectors. These relate mainly to the
tourism Integrated Resort Scheme projects, a Chinese integrated industrial project, and
some real estate development projects. Coping with these unprecedented capital inflows
remains a major challenge for the conduct of monetary policy for the Bank of Mauritius.
Today, the Bank of Mauritius finds itself confronted with the important challenge of reducing
the rate of inflation, which stood at 9.0 percent at the end of February 2008, and preserving
the competitiveness of the export-oriented sectors, given the tendency for the capital inflows
to generate pressures for exchange rate appreciation of the rupee.
There is a tendency in some quarters to think of exchange rate adjustment as an easy
solution to the type of problems that we are currently facing. Unfortunately, currency
appreciation or depreciation cannot be a panacea for our economic ills. We should not forget
that both appreciation or depreciation of a currency are at best a mixed blessing. While
appreciation may help us to contain inflation, it may also lead to a loss of international
competitiveness. Similarly, a depreciation of the currency, while being beneficial to the
export-oriented sectors, would also have potential inflationary consequences for the rest of
the population and for the wider economy. In terms of macroeconomic policies, there is a
policy trade-off between the extent of exchange rate adjustment and the inflation rate. The
way forward for a small open economy like Mauritius is for it to aim to become more
competitive through the achievement of real productivity gains. Long-term competitiveness
depends not on exchange rate changes but on productivity growth. Short-term exchange rate
accommodation can only serve to postpone the need to address the real issues relating to
productivity improvement and good management.
Mauritius has a managed floating exchange rate regime with no pre-announced path for the
exchange rate. As a matter of policy, the Bank has allowed the free play of market forces to
determine the exchange rate. Intervention by the Bank of Mauritius in the domestic interbank
foreign exchange market aims at smoothing out volatility in the rupee exchange rate and
improving the functioning of the market. It is not aimed at offsetting market forces or at
targeting any specific exchange rate as the Bank does not have any exchange rate target.
The policy approach used by the Bank of Mauritius in the face of incoming capital inflows has
also been validated by the recent Article IV Mission of the IMF. The conduct of monetary
policy has to be freed from sectoral considerations. It is not the role of the Central Bank to
support a particular sector at the expense of other sectors. Policy should aim at promoting
the general interest of the country and that is what we have been trying to do.
Part III: Challenges emerging from globalization
After these remarks relating to the specific context of Mauritius, what can we say about the
implications of globalization for the conduct of monetary policy in this kind of situation?
But, more generally, some of us are beginning to wonder whether globalization should lead
to a reassessment of central banks' primary objective of price stability. Especially now, in the
light of the recent actions by the US Federal Reserve which seems to be more concerned
about staving off recession and kick-starting the economy. Should we revisit the entire
framework of economic and monetary analyses in central banks? How do we react to a
range of variables that have now assumed greater importance in global markets?
Has globalization altered the way monetary policy influences inflation and output? In other
words, has it affected the transmission mechanism of monetary policy? Not that we knew
much about this in the first place, as some people would have you believe!
Should monetary policy react directly to exchange rate movements or should it only focus on
inflation and real GDP?
It is often asserted that the more we integrate global markets, the more we have to sit back
and let markets work. Can central bankers in small open economies faced with
unprecedented capital flows afford to do just that? How interventionist should a central bank
be under such circumstances?
How resilient are our monetary policy frameworks?
Do we need more sophisticated economic and monetary models to address the monetary
policy challenges stemming from globalization?
With globalization, small open economies receiving unprecedented capital flows face the
daunting task of managing these external flows in order to ensure macroeconomic and
financial stability. Monetary management has to contend with the vicissitudes of capital flows
and the increased volatility in exchange rates. While the distinction between short-term and
long-term capital flows may be conceptually clear, from an operational viewpoint, there are
severe problems in distinguishing between the two. At any given time, some of the inflows
could be of an enduring nature whereas others could be temporary and, hence, reversible. In
the face of such uncertainty in determining the temporary or permanent nature of inflows, is it
justified to blame your central banker if, out of prudence, he assumes that the flows are
temporary until their permanent nature can be established?
There are some underlying similarities in the challenges faced by India and Mauritius in the
face of capital inflows. There is also, however, a very significant difference in that. India does
not have full convertibility of the capital and financial account of the balance of payments.
This difference translates into some additional leeway for the Reserve Bank of India in
managing capital flows. Mauritius with its open capital and financial account, since the
abolition of all capital controls in July 1994, does not have some of the tools which RBI has at
its disposal. Introducing capital controls under any guise is certainly not an option for us.
Part IV: Challenges for monetary policy
What, then, are the challenges faced by a small open economy in the conduct of monetary
policy when confronted by unprecedented capital flows? As I said in my opening remarks,
this is a question which has been troubling me ever since I took the helm of the Bank of
Mauritius one year ago.
As most of you are no doubt aware, in economics, simultaneously targeting an exchange
rate and maintaining an independent monetary policy, with an open capital account, is
considered an impossible trinity. This famous trilemma follows from the Mundell-Fleming
model, which states that countries cannot simultaneously fix their exchange rate, have an
open capital account, and pursue an independent monetary policy. Only two of these three
objectives are mutually consistent. Even with a fully floating exchange rate, it has become
more difficult for a small open economy facing unprecedented capital flows to run an
independent monetary policy. And, boy, don't I know it!
Governor Reddy, in his recent address last week, in Paris at the International Symposium of
the Banque de France on "Globalization, Inflation and Monetary Policy", underlined the
simultaneous challenges, from several angles, to the conduct of monetary policy arising from
recent financial market turbulence, the growing importance of global factors relating to abrupt
and large policy shifts in monetary policy measures of the major economies, and the
unprecedented inflationary pressures due to food and energy prices. I fully endorse
Governor's Reddy's view that these developments certainly warrant significant and
innovative ways of cooperation among central bankers.
Interventions by the Central Bank to purchase large amounts of foreign exchange from the
market have an expansionary impact on the domestic money supply and pose challenges for
the conduct of monetary policy. Just to illustrate the point I am trying to make, only yesterday
we at the Bank of Mauritius had to intervene to purchase Rs 1.8 billion of foreign currency in
dollars and Euros from the domestic forex market to prevent this market from seizing up
altogether as major players reached their foreign currency exposure limits. This was a new
record, improving on the previous record for a single transaction of Rs 1.6 billion which we
conducted just before Christmas 2007 when we purchased Euros 40.5 million from the
market. I suspect the present record will not stand for long either. To appreciate the relative
enormity of these transactions, remember that the Bank's capital base is currently Rs 1
billion and our general reserves stand at Rs 23.5 billion.
To sterilize the excess liquidity stemming from these capital inflows, the Central Bank has to
issue Government or Central Bank securities. In the case of Mauritius, where we now have a
separation of debt management from monetary management, this entails the issue of a huge
amount of Bank of Mauritius Bills for monetary policy purposes, with a potentially adverse
impact on the Central Bank's balance sheet and its profit and loss account. It is instructive to
recall here that in the recent past, more precisely in FY 2003-04, the Bank of Mauritius
incurred a loss accruing largely from its monetary operations at a time when its returns on its
foreign exchange reserves were also at a very low point, with rates on the US dollar hovering
around 1 per cent.
With the current apprehension of an imminent recession in the United States and the
aggressive easing of interest rates by the US Federal Reserve, conducting such levels of
monetary operations to sterilise the projected volume of capital inflows would, in all
likelihood, move the Central Bank into negative territory. Such an outcome becomes a near
certainty given the significant interest rate differential that exists between the yields on
Central Bank securities, currently around 8.0 per cent, and placements in US dollars which
stand at around 3.0 per cent.
Globalization has indeed complicated the task of monetary management .With globalized
capital markets, a small open economy, faced with such unprecedented capital flows, must
grapple with a potentially very serious challenge of keeping inflation under control, if it is to
prevent exchange rate appreciation from undermining external competitiveness. There are
clearly costs for the Central Bank in running monetary policy that have to be explicitly
recognized. I believe that the instruments and operating procedures of monetary policy have
also to be constantly refined to meet the challenges that arise from unprecedented capital
inflows.
Moreover, central banks are required to strengthen their balance sheets in order to manage
the shocks impacting on the economy. A central bank's capital and reserves have to be
strong enough to be able to sustain repeated intervention in the money market. Given the
uncertainty surrounding the nature of capital inflows, it would also be prudent for the central
bank in small open economies to build up reserves as a cushion against a possible change
in investor sentiment, leading to a sudden stop syndrome and the even mare dreaded
reversal of capital flows. In these circumstances, should the Governor sound the alarm bell
and seek help from the Minister of Finance? To offset the strong impulse on aggregate
demand from the large capital flows, isn't a hefty dose of fiscal consolidation just what the
doctor ordered? Or will the Governor be accused of being a spoilsport in such good and
buoyant times?
To sum up then, I would say that central bankers are indeed living in very interesting times. It
is taken for granted that they are a smart bunch. But being smart is no longer enough. We
must also be lucky. I have tried to demonstrate that, at the present juncture, the conduct of
monetary policy is nothing short of a gargantuan task for the lilliputian economy that
Mauritius is.
To meet some of the emerging and unprecedented challenges of the financial sector, the
Bank of Mauritius, which as I said earlier celebrated its 40th anniversary last year, is pursuing
with renewed vigour and determination the exciting journey of modernization. We have
enlisted the support of the Reserve Bank of India in the area of bank supervision, thus
renewing with a tradition going back to the early years of our existence when RBI officers
helped to establish the Bank of Mauritius. We are now engaged in a major restructuring of
our internal organisation with the help of resource persons from Bank Negara Malaysia. The
structure is now flatter, with the creation of Divisions within the Bank that are responsible for
particular focused areas of activity. The Bank has adopted an open and transparent staffing
strategy, with the promotion of fifty-five existing staff and recruitment of twenty-three
additional staff from outside the Bank. To appreciate how fundamental is this transformation,
just remember that our total staff strength adds up to only 250 persons. We are enhancing
our skills and knowledge base to add value to the organisation and contribute directly
towards the attainment of our organisational goals.