market expects two further policy rate declines of 25 basis points each. the tendency globally has been to move towards a policy rate decline, as evidenced by around 120 decisions from central banks around the world to lower their respective policy rate since the start of 2024. domestic economic developments on the domestic front, first - quarter gdp growth stood at 6. 4 per cent, led by robust performances of main economic sectors, including'accommodation and food service activities ','construction ','financial and insurance activities ','transportation'and'wholesale and retail trade '. domestic consumption and investment continued to rise at 1 / 4 bis - central bankers'speeches a solid pace, supported to a large extent by ongoing capital projects and buoyant household spending. the tourism sector continues to be a key engine of growth, largely reflecting upbeat demand for travel and tourism and effective promotional campaigns. tourist arrivals aggregated 865, 523 for the period january to august 2024, constituting a recovery rate of 99. 2 per cent relative to the 2019 level. arrivals were up by 7. 7 per cent compared to january - august 2023. tourism earnings were also buoyant, totalling rs51. 3 billion over the period january to july 2024, higher by 42. 5 per cent and 6. 6 per cent compared to the corresponding periods of 2019 and 2023, respectively. the current account deficit is projected to improve from 4. 5 per cent of gdp in 2023 to 4. 3 per cent of gdp in 2024, on account of healthy tourism earnings and higher interest income. gross official international reserves of the country remained comfortable at usd7. 9 billion as at 17 september 2024, representing around 12 months of import cover, thus providing adequate buffers against potential external shocks. the banking sector remains resilient with strong capital and liquidity buffers. inflation inflation in mauritius has continued to decline, mostly reflecting the benign global food and energy price environment, lower shipping costs as well as the fading out of domestic shocks. headline inflation fell from a peak of 11. 3 per cent in february 2023 to 4. 0 per cent in august 2024, marking 18 months of successive decline and stayed within the inflation target range of 2 to 5 per cent since the last four months. core measures of inflation also remained engaged on a firm downward trend, standing at 2. 3 per cent in august. a more granular analysis reveals that the proportion of pro - inflation items in the cpi basket

ii entails significant transition costs for both banks and supervisors. however, even in the absence of basel ii, well managed financial institutions would have continued to update and improve their it systems and risk management practices simply to keep pace with the evolving marketplace. basel ii has pushed firms further than they may have gone on their own. in addition, basel ii confers other benefits, including greater operational efficiencies, better capital allocation and greater shareholder value through the use of improved risk models and reporting capabilities. one might reasonably expect such improvements to lead to more consistent profits and reduced volatility of credit losses as a result of consistent risk spreading, more effective deployment of capital, and the ability to make better business decisions. conclusion i would like to close by reiterating the importance of basel ii in support of financial resiliency, especially in this age of rapid change and innovation. basel ii encourages better measurement and management of risk exposures and the treatment of complex financial instruments. it seeks to advance the practice of stress testing as well as other risk management techniques. under pillar 2, banks take the lead in developing internal risk management processes that support robust estimates of regulatory and economic capital. through enhanced transparency and market discipline, pillar 3 will become more important because of increasing intermediation of risk through the capital markets. both banks and supervisors need to take a long - term perspective when considering the benefits of basel ii. regulatory capital, risk management and risk - based supervision are aligned in a more consistent manner that can accommodate financial innovation. this capital framework is a long - term investment that if done properly will lay the foundation for further evolution. it is through strong coordination among supervisors and with you – the industry – that we can realise the full potential of the basel ii framework. thank you.