Focus on financial market infrastructures Let me now focus on the case of market infrastructures to illustrate how the mindset and tools I have just described can also feed into the way we perform our roles, and in particular our role as service provider. From the first-generation of the Target system twenty years ago, the Eurosystem has  demonstrated a strong political will to foster innovation and support capital markets integration and development, through the provision of clearing and settlement services in central bank money for financial intermediaries. These services, namely T2 and T2S, have established themselves as the backbone of the financial market infrastructures for the euro. More recently, the Eurosystem has developed its Vision 2020 program comprising: TIPS, an instant payment solution, launched in November 2018 to settle instant payments ; the T2-T2S consolidation to optimize and enhance liquidity management and cash and securities services planned for 2021 ; last but not least, the ECMS (European Collateral Management System) planned to be launched in 2022, and designed to provide a unified platform for the management of standard monetary policy operations and the associated collateral. These are European successes and ambition. Nevertheless, we have to address new  challenges. In the recent years, there has been a strong demand for quick and safe cross-border payment solutions, available 24/7, enabling smooth exchanges. In Europe, various domestic instant payment solutions have emerged in a certain number of countries, available 24/7, settling retail payment orders up to 15 000 euros in less than 15 seconds.

Further, the issue of a parallel currency market existing among the cross border traders between the two countries point to the need to strengthen bilateral trade between our countries and put in place payment systems that should promote this trade based on the exchange of the two local currencies. In this regard, this agreement is critical to facilitate better trade between our sister countries. Your Excellency, there are, however, challenges associated with the currency of one country circulating in another country and these need careful scrutiny and handling. These include vices such as counterfeiting and facilitating illegal trade as well as enhancing cross border money laundering activities. Moreover, to us as monetary authorities, cross-border local currency circulation creates the potential of complicating the conduct of monetary policy, especially if a significant amount of the country’s domestic currency is being used outside the jurisdiction. For us who target monetary aggregates, this may lead to implementation of inappropriate monetary policy decisions which may adversely affect the real economy. Currency repatriation is critical as it will allow us adjust the currency in circulation, a key component of reserve money, which is the intermediate target in our monetary policy operations. We are therefore looking forward to the implementation of the agreement we are signing today to facilitate currency repatriation between our two Central Banks. I am therefore, very pleased that the long months of discussions between the Banco de Mozambique and the Bank of Zambia have resulted in the mutual agreement to repatriate both the Meticais and Kwacha.