basis. monetary policy takes time to make its beneficial effects felt in any economic society. but i do also reckon that a few months or even a single month or a single day may sometime appear to be a long time. events having undesirable consequences for the economy can take place in minutes. we live in an economic society wherein the role of money is taken for granted. the basic importance of money in the economy is unwittingly overlooked. buyers and sellers, savers and investors and borrowers and lenders are, as you are aware, linked through money. it goes to say that money which links them should have our confidence if our economy has to perform well. money that keeps its value will have the confidence it deserves. as is usually said among central bankers it is the democratic right of every citizen to see that the length of a metre or the weight of a kilogramme does not vary over time. why then should the value of money change over time? clearly, the basic objective of monetary policy of the bank, which is the sole issuer of currency in the country, should be to preserve the value of money. the bank of mauritius is the nucleus in the process of money creation in the economy. it is mistakenly believed that the bank has the intrinsic power of simultaneously achieving a multiplicity of objectives. this is a gross misconception. paradoxically, there is also a common tendency for some in the exporting community to believe that inflation need not be the prime consideration of the bank. this is also an incorrect view of what should be the objective of our monetary policy. our business community and the public at large would be badly served if the bank ’ s monetary policy stance irresponsibly fuels inflation. suffice to say that inflation creates uncertainty, breeds inefficiency and makes the economy less productive. worst, it creates inequity. those who gain from inflation necessarily gain at the expense of others. in fact, the bank ’ s power to print money is limited by the leverage available to monetary policy. the bank uses this leverage to enhance the economic performance of our country. in simple terms, the bank manages liquidity in the economy - which in turns affects expenditure – in such a manner that is consistent with the capacity of the economy to grow but, as far as possible, without giving rise to inflationary pressures. monetary policy would not be doing justice to all of us if it unleashes forces that create inflation.

witnessed the establishment of its first islamic commercial bank. islamic finance extended quickly to other parts of the world, most of which during the past thirty years or so. other maghreb countries, morocco and tunisia began the experience of islamic finance by allowing conventional banks to offer certain islamic products but these institutions are faced with strong competition from the region ’ s conventional banks. remarkably, sudan only established its first sharia - compliant bank in 1977 and the country ’ s islamic economic system has since then been continuously developing. sudan is the only country in this part of the world to have a wholly islamic financial sector. within sub - saharan africa, south africa led the way, with one of the largest international islamic banking conglomerates namely al - baraka banking group having been present there for the last 20 years alongside other institutions conducting islamic finance in the country. more recently, other countries have joined the league namely kenya, tanzania, botswana and nigeria. governments of ghana, uganda, ivory coast, somalia, malawi and zambia are working towards introducing islamic banking in their respective countries. presently, the african continent hosts over 250 islamic financial institutions that offer islamic financial services including islamic banks, takaful companies, islamic funds, mudarabahs and islamic microfinance. noteworthy also is that over the last two years, the african continent has demonstrated interest in creating an islamic capital market via initiatives for issuance of sovereign sukuks in a few countries including nigeria, kenya, south africa and senegal. as of date, two countries have successfully issued their soveriegn sukuks namely sudan and gambia. the rapid pace of the development of islamic finance leaves no doubt among policy makers all over africa including mauritius that islamic finance presents many prospects for development. considering africa ’ s population of nearly one billion people, half of which are of muslim faith, and the numerous hurdles to financial access on the continent, islamic finance could become a key factor in the promotion of financial inclusion by appealing to a large muslim population in certain parts of africa. the mauritian experience ladies and gentlemen, over the past three years, the mauritian authorities took some initiatives towards the promotion of islamic banking and finance in our jurisdiction. bis central bankers ’ speeches • the banking legislation has been amended to enable banks to conduct islamic banking business exclusively or through a window ; • fiscal reforms were brought in to eliminate tax disadvantages that would otherwise have materialised in the islamic mode of finance ; • we joined the ifsb to facilitate the rapid development of islamic