this opportunity to underline that the authorities are fully committed to have the upper hand in the combat against money laundering and terrorism financing. i also take this opportunity to once again thank the eu aml / cft global facility for the ongoing assistance and guidance. our journey with the eu global facility will be sustained in the long term for further building resilience across our sectors on aml / cft matters. one such forthcoming project with the eu global facility covers correspondent banking. i look forward to yet another successful project together. we also look forward to our continuous engagements with respect to the exit of mauritius from the eu list of high risk third countries in the near future. with these words, ladies and gentlemen, i wish you all fruitful deliberations in this workshop. i hope that it will enhance your knowledge and bring added value to your work. i thank you for your attention. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - end of script - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - governor harvesh seegolam le meridien hotel, mauritius

with fast moving traffic, it ’ s a different story, and safety demands that pedestrians wait until they are confident they can make it to the other side. the same holds true for central bank governors. ” the introduction of the euro, the september 11 attacks that impacted seriously on the us economy which is an importer of the last resort, the ever growing instability in the middle east, the disagreements over trade policies and tendencies for countries to resort to protectionist measures in one form or the other, volatility in the exchange rates of major currencies in the international exchanges as well as the weak performance of most economies across the world have not made monetary policy making here and abroad a plain sailing endeavour. successive years of uncertainties intensified by events beyond the control of central banks have increasingly blurred visibility. central banks have to constantly chart a safe way forward in this world of unexpected twists and turns of events. five years ago, substantial capital outflows triggered by a loss of confidence in the rupee had brought down the foreign reserves of the bank of mauritius to unacceptable levels. the rapid weakening of the euro in the international exchanges following its introduction in january 1999 translated into a significant appreciation of the rupee. and that appreciation of the rupee was a quick reversal of the preceding three years of rapid depreciation of the rupee. the mood of pessimism that emerged in the wake of the september 11 attacks brought down the world economy to the throes of deflation. central banks around the world effected a series of cuts in interest rates in a bid to revitalize their respective economies. notwithstanding the policies adopted by central banks, the leading world economies entered a period of balance sheet recession in recent years. in the wake of drastic fall in equity prices, many companies the world over could no longer afford to maximize profits. they chose to restructure their balance sheets for corporate governance so demanded. however, the household sector continued to save money and the business community almost stopped borrowing money even at low rates of interest. this is a peculiar situation or rather a fallacy of composition problem that exacerbated the recessionary trend in the world economy. monetary policy becomes much less effective when only few companies are willing to borrow in this type of a recession. fiscal policy takes over as an absolutely important instrument to boost up aggregate demand as well as to keep money supply from shrinking. in such troubled waters the navigational hazard is impaired visibility, which is quite often the case. monetary policy