net open positions and hedge exchange rate risks. a more dynamic 3 / 5 bis central bankers'speeches money market, a likely consequence of the new monetary policy operational framework, will provide considerable support to the fx market and stimulate its development. macroeconomic policies in the past few years have attracted fx inflows. there is, however, a need to address the numerous challenges facing the export sector given the weakening economic prospects in major exports markets. structural reforms and measures to attract foreign direct investment in productive sectors are prerequisites to the strategy to rekindle the export sector. ladies and gentlemen, the country ’ s foreign exchange reserves have attained an all - time high of usd7. 3 billion. though the current account remains in deficit, the capital and financial accounts of the balance of payments have steadily generated positive fx inflows which have helped to finance this deficit. the one - year level of import cover is a solid insulation against adverse external shocks. as you all know, the management of the central bank ’ s balance sheet has wide - ranging macroeconomic implications. the balance sheet comprises mainly fx reserves and monetary policy instruments. a strong and sustainable balance sheet position ensures that the bank can fulfil its policy goals effectively. in the light of the low yield global environment and the high costs inherent to conducting monetary operations, the bank has recently received technical advice for an optimisation of its balance sheet management. further, the bank intends to increase transparency in the conduct of its operations through additional disclosures in its financial statements. ladies and gentlemen, the protection and consolidation of our financial industry ’ s ecosystem is a priority. we have strengthened the legal and regulatory frameworks through the issuance of new guidelines and enhancement of existing ones and the enactment of several key pieces of legislation. these pave the way for innovations in payment systems and the protection of consumers of financial products and services. [ the main ones are the national payment systems act 2018, the ombudsperson for financial services act 2018, and the mauritius deposit insurance scheme act 2019. ] the bank is also finalising the revision of the bank of mauritius act 2004 and the banking act 2004. these revised enactments will modernise the central banking legal framework in sync with international as well as domestic developments. the upgrading of the banking laws and revisions of the regulations will help keep pace with the progress in this industry and fast evolving financial ecosystem. cloud technology, artificial intelligence, cyber - security, fintech, regtech and suptech

and liabilities. i strongly encourage all those entities to provide their responses accurately and in a timely manner. let me now dwell on recent exchange rate developments, a topic on which i have been frequently solicited from various quarters. as i said at the post - mpc press briefing last wednesday, the rupee has depreciated against the us dollar both in nominal and real terms since the beginning of 2019. this depreciation was mostly driven by the appreciation of the us dollar on the international market and partly by domestic economic conditions. concerns regarding an overvaluation of the rupee at the beginning of the year have receded substantially. you will recall that the imf has mentioned in several of its article iv consultation staff reports that the rupee was overvalued. this seems to have been corrected. i wish to also highlight that the bank has not intervened at all on the fx market since mid - august 2019. this brings me to the second part of my speech which is about what will happen. i will now dwell on the core elements of the roadmap that the bank has drawn to pave the way for a jurisdiction that fully embraces technology. the successful shift in the operational target of monetary policy has enabled us to lay down a solid foundation for a thorough revamp of the monetary policy operational framework. we propose to roll out a new framework next year, which is being reviewed to infuse greater dynamism into the money market and set the basis for a more reliable benchmark yield curve. as part of its new strategy, the bank will strengthen its forward - looking monetary policy framework. the overall communication on monetary policy will be upgraded, complemented by more regular dialogue with stakeholders. these improvements will help anchor inflation expectations and enhance clarity on policy formulation and objective. financial players, especially banks given their prominence in the sector, have an important role to play in the transmission mechanism of monetary policy signals to the economy. at my last meeting of the banking committee in october 2019, i had urged bankers to ensure that market interest rates are adjusted in a timely manner to changes in the policy rate in order to ensure the effectiveness of monetary policy. to boost the development of the fx market, the bank is considering various measures, such as improving transparency on exchange rates, heightening efficiency on the fx market, and the adoption by the industry of the global fx code. these measures would enhance dynamism in the fx market and offer greater opportunities to market operators to manage