a floating exchange rate. this had been forced on sweden by international developments with deregulation of the capital markets, in sweden as well, and not least by failures in attempts at corporative co - operation and stabilisation policy interventions. the government could now look back at 15 years of unsuccessful stabilisation policy. the shift to a new policy took place between 1993 and 1995. however, it should be added with regard to the failed defence of the krona, that experiences of free capital movements were not especially extensive. the government and the riksbank and political analysts in sweden did not have any experience of the conditions for economic policy in a globalised world. the new stabilisation policy regime the government formulated the goal for monetary policy itself in january 1993. inflation was to be maintained at two per cent per year with a tolerance interval of + / - 1 per cent. the goal is symmetric. it is as important to bring inflation up to two per cent when actual inflation is under two per cent as it is to bring down inflation when it is higher than the target. this can be said but a lot of practical issues remained to be resolved and the answers are not at all obvious : 1. how is inflation to be measured : by cpi, the gdp deflator, or some other measure of price movements? 2. shall the riksbank have other objectives besides price stability? 3. shall policies be directed at controlling the money supply or inflation directly? 4. how is confidence to be established in the riksbank ’ s policy and expectations about low inflation? 1. the inflation target the riksbank ’ s objectives has been expressed in the following way in legislation : “ the objective of the riksbank ’ s operations shall be to maintain price stability. in addition, the riksbank shall promote a safe and efficient payment system. ” the first objective has therefore been made concrete by the riksbank itself as 2 per cent inflation with a tolerance of one per cent upwards or downwards. the second objective, stability in the payment system requires monitoring of the “ infrastructure ” in the payment system and of the major institutions that could be associated with a systemic risk for the banking system. the second objective is hardly known although important and it will also continue to be the riksbank ’ s responsibility if sweden joins the monetary union, the emu. the riksbank has opted to measure inflation by the consumer price index, cpi. this measure has certain disadvantages,

mauritian miracle is not just a thing of the past. but it requires a new spirit of adventure to match our talents to the opportunities of the cyber age. we must overcome the new threats through a concerted bis central bankers ’ speeches pursuit of macro - economic and macro - prudential policy. only then can we secure economic and financial stability and growth with equity. the keys to our future prosperity 28. the keys to the future are increased personal and corporate accountability and multisector collaboration. we need the private sector to take a lead role. we need more stimulation and nurturing of new start - ups. we need to challenge the monopolies of the past. we need a slimmer, more effective and efficient public sector, which is seriously in need of reform. some task there! for it has been well said : “ reorganising the civil service is like drawing a knife through a bowl of marbles. ” 29. but in racing ahead on this path, holding forth the torch of new technology, we must face up to the many risks of the cyber age. and in this, i am pleased to see, many of our brightest bankers are taking a lead. for, above all we need the continuing positive role of our highly competitive banking sector in an even closer and more effective working relationship with the real economy. and we need more inclusive management in the public and the private sector. here i ’ m reminded of the story of that great british military leader, the duke of wellington, who vanquished napoleon at the battle of waterloo in 1815. later he became prime minister and found government to be a harder nut to crack. after his first cabinet meeting, he was heard to remark : “ i gave them my orders, and then, damn it, they just sat down and started to discuss them all! ” hats off to our local bankers 30. so, let ’ s now take our hats off to our local bankers! they have never been part of casino banking. and they have a long history of serving the nation through their customers. as a central bank we are proud of our 46 - year history : just imagine how much more so must be les grandes dames de la place d ’ armes!. mcb inaugurated here in 1838 ; hsbc in 1916 ; and barclays in 1919. that is a span of over 175 years, with decades and decades of experience and skill, serving the people of this country. the state bank of mauritius