policy predictability. that, briefly, is how we coped with the macroeconomic challenges thrown up by the crisis. 3. conducting monetary policy in an uncertain world let me move on to my third theme. almost by definition, central banks operate in an uncertain world since monetary policy works with a well - known lag – a long and variable lag. conducting monetary policy against the backdrop of the global financial crisis and the ensuing economic downturn is a challenging task, particularly for small open economies like mauritius. the bank had to react appropriately and in a timely manner. here again, extreme vigilance was the order of the day. as i mentioned earlier, we reduced the key repo rate by a cumulative 250 basis points over a period of six months. there were extraordinary monetary policy committee meetings. the recent imf article iv consultation mission which left over the weekend qualified the monetary and exchange rate framework applied by the bank as “ hybrid - inflation targeting ” and declared it well - suited to the needs of the mauritian economy. the imf has gone further and concluded that, in its view, the mauritian regime can be usefully considered as a model for other emerging market countries. we are much encouraged by this high - level positive endorsement – which stands in sharp contrast to the brickbats thrown at us regularly in the local press, the business press as well as the popular press. while there are some positive signs of a budding recovery in our major export markets, the global economic outlook is still subject to a very high degree of uncertainty. the cycle of monetary easing by major economies appears to have bottomed out and increasing attention is now being focused on so - called “ exit strategies ” without, however, jeopardizing the nascent recovery. in the mauritian context, we do not really have an “ exit ” problem : the magnitude of fiscal adjustment required is not all that significant as the budget deficit is under control and our debt - to - gdp ratio is within normal prudential limits. the headline inflation rate has declined significantly from 9. 7 per cent at the end of december 2008 to 3. 6 per cent at the end of october 2009. however, over the medium term, the inflation outlook remains uncertain. potential risks stem from the future course of oil and food prices on international markets, which are factors beyond the reach of domestic policy - makers. on this score, too, policy has been very supportive by lowering inflation and stabilising inflation

how the crisis will play out. the fog of uncertainty casts a pall over global growth prospects. whatever happens, we must remain agile and alert to ride the slightest favourable wave even as the european and us economies flounder in its wake. this scene is all the more curious for the west does not lack advice on such matters. as george burns has remarked : “ it ’ s just a pity that those who really know how to run the country are just too busy driving taxi - cabs or cutting hair. ” bis central bankers ’ speeches so let me add my two - pennyworth to the great debate on the financial and economic crisis and how well we have fared. i believe it was talleyrand, napoleon ’ s aristocratic minister of foreign affairs, who on being asked what he did during the revolution, gave a pithy reply : “ i survived. ” and we have survived, too, with scarcely an african country falling into recession, no banks going bust, and the african economy on the up and up. in mauritius we have certainly done better this year than in the previous two years. in africa, the impact of the crisis was felt mainly through the trade channel and the falloff of fdi flows. this was exacerbated by loose monetary policy in some countries where, not surprisingly, double - digit inflation was back in 2011. your bank was under constant pressure to loosen our monetary policy, to depreciate the currency just a little, to accept a little more inflation, allegedly to save jobs and stimulate growth. let me ask you this. do you really think we were wrong to resist those siren calls? would you really really have preferred inflation in the high twenties to finish off the year? mauritius fared well among middle - income countries, with gdp growth above 4 % this year, or slightly below the trend rate of the pre - crisis decades. we reinforced our regional and international positions in a number of global rankings which i would have happily walked you through, but for the pressure of time. we are, of course, not insulated from the problems affecting the rest of the world and inflationary pressures have increased ; but, with well - timed monetary steps, we have succeeded in containing inflation to an expected 5. 1 % in 2011. let ’ s keep on course, steady as she goes. now let me turn to our economic prospects and our high aspirations we are living in troubled and testing times. several questions arise. will we be agile enough