at government ’ s own finances. are government finances out of balance? yes, very much indeed. are corrections taking place? yes, indeed. the current account deficit for the preceding fiscal year reached a high of over rs 10 billion, that is, over 5 per cent of gdp, representing an increase of over rs4. 0 billion in just one year. had the world price of oil and the volume of imports of petroleum products remained unchanged the current account deficit would have been smaller, that is, in the region of rs5 billion, implying that the pressures on the domestic foreign exchange market would have been much less. our balance of payments projections for the current fiscal year point towards the start of a containment of the current account deficit. total imports on a c. i. f. basis, excluding exceptional purchase of aircrafts by air mauritius, are projected to grow by 6 per cent in the current fiscal year, way down from 20 per cent and 21 per cent in the preceding two years. in fact the current account deficit for the current fiscal year is expected to contract by nearly rs 6. 0 billion. the deficit is projected to be reduced to more than half the size of the deficit in the preceding year. without any doubt, if the present policy stand is maintained, the current account deficit in the near future should thin out with the result that the tightness in the foreign exchange market would ease to quite an extent. a deficit in the current account reflects a deficiency of savings in the economy. over the last few years consumption expenditure has been growing at a higher rate than the growth rate of gdp itself. essentially, it means that the growth rate of consumption expenditure has been outpacing the growth rate of total value added by our active labour force in the economy. although we are not through an economic boom period this phenomenon means what it means. after a period of economic prosperity, people get used to a certain level of income. they find it extremely difficult to adjust consumption expenditure downward when rationality calls for it. those of us familiar with consumption theory will recall the duesenberry effect. simultaneously, we also face a disturbing phenomenon in the labour market. the labour market seems to be characterized by the “ backward - bending supply curve ”. this suggests that higher wages or salaries do not produce more work but less and the way to increase work effort is to lower compensation per unit. let me share with you a reflection of andrew carnegie : ‘ years ago i distributed charity indiscriminately

operational target from the overnight interbank interest rate to the yield on 91 - day bill. i am pleased to underline that, what was a long - overdue shift, has borne positive results in terms of steering short - term interest rates close to the policy rate. the bank introduced the 28 - day bank of mauritius bills in september 2019. presently, a net amount of rs2. 8 billion has been issued to banks. this instrument has contributed significantly to improve liquidity management and ensure a smooth yield curve. there is a fourth element that i wish to highlight. i am speaking of climate change, which is fast emerging as a priority for many countries. the 2019 edition of the annual world economic forum publication lists extreme weather events, natural disasters, and failure of climate - change mitigation and adaptation among the top five threats most likely to occur in the next 10 years. some 42 central banks and other regulatory authorities have set up the network on greening the financial system. this forum focuses on climate risk management in the financial sector and fosters the transition toward a sustainable economy. there is a clear economic case for building resilience to climate change as it may directly affect financial institutions ’ balance sheets. the bank has included climate change on its agenda and i will encourage all of you to do the same. i intend to engage with banks on this issue in the near future and request them to consider to what extent climate change is, or can be, factored in their decision - making process. 2 / 5 bis central bankers'speeches last but not least, we are constantly improving our regulatory framework to better align it with international standards and reinforce the soundness as well as the attractiveness of our financial industry. the bank is sparing no effort to support the country ’ s strategy to become a leading regional financial hub. in line with the country ’ s africa strategy, the development of regional payment facilities will be accelerated to transform mauritius into a gateway for cross - border payments. before proceeding to the second part of my speech, let me spend a few minutes on two specific issues. the quality of macroeconomic statistics is of utmost importance in policymaking. as the official compiler of external sector statistics, the bank has to measure cross - border transactions and reflect them in the balance of payments and international investment position for mauritius. the bank has been conducting an annual foreign assets and liabilities survey ( fals ) with entities from various sectors, which calls for specific information on our country ’ s foreign assets