will continue on its downward trend. an important prerequisite in the fight against inflation is for the central bank to disseminate information effectively on monetary policy issues. as provided in the bank of mauritius act 2004, the bank publishes a monetary policy statement after each mpc meeting to explain the main assessments and findings of the mpc. the statement also discloses the voting pattern of the mpc members. in the implementation of monetary policy, the bank has as far as possible limited its market interventions and allowed free play of market forces. in the domestic foreign exchange market, the bank intervened to sell foreign currencies for an amount of us $ 48. 8 million to alleviate excess demand in the first two months of the year before purchasing an amount of us $ 252. 8 million between february and april as the situation turned around and the rupee stabilised. with an appreciation in the rupee exchange rate of about 9. 4 per cent against the us dollar from january up to november, the bank intervened again in early december to purchase euros 40. 5 million from the market. in the same vein, the net foreign assets of the bank are estimated at around rs51 billion as at end - december, that is, an increase of some 16 per cent since the beginning of january. in the domestic money market, this year provided the first occasion to test the new monetary policy framework introduced in december 2006. to reduce excess liquidity prevailing in the system and to keep the overnight interbank interest rates within the corridor around the key repo rate, the bank conducted a number of reverse repos and issued some rs14 billion of bank of mauritius bills. as participation at the weekly auctions did not always reflect the forecast excess liquidity positions of banks, and there seemed to be a risk that the bank ’ s intervention would actually lead to more volatile yields, the bank became reluctant to use reverse repos after may. there seemed to be a wedge between effective excessive liquidity, as showed in the bidding behaviour of banks, and liquidity levels forecast by the bank ’ s models. in an attempt to tackle this, a new facility in the form of a special deposit was established in november whereby banks were invited to deposit their excess funds with the bank for a period of 14 days at a rate that was below the lower bound of the corridor. it is expected that further adjustments will be required in 2008 to the monetary policy framework to take into account the apparently quasi - permanent excess liquidity conditions in the domestic

mauritian rupees for spending in mauritius. i believe that the flow of tourism between india and mauritius may be enhanced under a suitable exchange system between our two countries. bank of baroda can be called upon to play a prominent role in this respect. the application of a mechanism similar to this one has helped to maintain a steady and growing level of tourism between south africa and mauritius over the years. south african rand banknotes are today freely exchanged by south african travellers in mauritius. i now wish to commend the recent marketing initiatives of bank of baroda to make itself more visible in our banking industry. “ rapid funds2india ”, a service free of cost to the bank ’ s customers in mauritius and india, is a laudable effort towards lower cost of banking services. the bank has made substantial investment in it and its entire banking operations have now migrated to state - of - the - art it platform enabling global connectivity. it is a fact that technological innovations have today significantly brought down administrative costs. i strongly believe that such reductions in costs should be passed on to customers through lower fees and charges. in today ’ s world of financial globalization, banks can no longer limit themselves to geographical areas. i understand that bank of baroda ranks among the top 400 banks worldwide and they are not alone. two other indian banks namely, the state bank of india and icici are also performing very well. i again congratulate the bank of baroda on its 100th foundation day and wish it another 100 years of success. thank you for your attention.