monetary policy in trinidad and tobago : how it stacks up to other central banks address by dr. alvin hilaire, governor of the central bank of trinidad and tobago launch of monetary policy report, november 23, 2017 1. central banks worldwide are making increasing efforts to lift the veil of mystery that has traditionally enveloped the world of monetary policy. apart from making transactions with notes and coins, the general public often has very little notion of what goes on at a central bank. for most people — apart from perhaps academics and those involved directly in finance — their eyes glaze over when seemingly esoteric concepts involving monetary aggregates, transmission mechanisms and global interest parity conditions are used to explain what the institution does. what they do relate to, however, is how much their notes and coins can purchase over time! this simple consideration — the changing value of money as represented by the inflation rate — is really at the core of monetary policy. of course, in a world with 24 / 7 financial transactions, goods and services changing hands by the second, and instantaneous cross - border capital flows, keeping inflation in check requires some deft maneuvering by a central bank. 2. in the early days of central banking, it was seen as a virtue for governors to communicate very little on what they were doing for fear that misinterpretation by the public would destabilize financial markets. even when they communicated, efforts would be made to be as vague as possible : consider for example the statement of alan greenspan, chairman of the us federal reserve between 1987 and 2006 to congress in 1987 : “ if i turn out to be particularly clear, you ’ ve probably misunderstood what i said. ” but things have evolved meaningfully over time, and nowadays, most central banks have substantially stepped up communication of their policies, realizing that this could help to build confidence and understanding and actually facilitate policy effectiveness. apart from the us fed, the european central bank, norges bank and sveriges riksbank are among those that have taken meaningful strides in boosting communication. at the central bank of trinidad and tobago, enhanced communication is one of the key objectives of our current strategic plan ( available at www. central - bank. org. tt ) and this presentation today is an effort to set the stage in explaining how monetary policy is being conducted ( we ’ ll treat with the financial stability objective involving supervision of financial institutions at another time ). 3. while inflation control is a well - established objective, in

humble but powerful emissary, defeated the evil king ravan of lanka and rescued his wife sita who had been abducted by ravan. upon ram ’ s return from exile, the people of ayodhya celebrated by lighting rows of deyas to welcome him back. this is perhaps the most common story of the origin of divali. last year, instead of going with the obvious, we chose the character hanuman for our divali program. in selecting hanuman, we realized there were themes and lessons in the ramayana that were very applicable to the central bank. we highlighted how like hanuman, central bank is a faithful servant to the people of our country. we highlighted how we diligently ensure their financial protection, no matter the size and ferocity of the ravans ( demons ) we take on. this year, we decided to continue with our exploration of the ramayana because it is my one intention that anyone attending our cultural programs should walk away with a greater appreciation and new found respect for whatever artform we are showcasing. bis central bankers ’ speeches so tonight when you leave here, no matter where you come from, i hope you are inspired not to see the ramayana as a deeply religious, complex hindu holy book, but a story poetically written that has at its heart the universal triumph of good over evil. tonight ’ s performance is entitled paanch kahani. it is hindi for five stories. we selected five stories from the ramayana because central bank is celebrating its 50th anniversary this december, and each story represents a decade in the bank ’ s life. the five stories to be performed by nrityanjali theatre are not the obvious divali stories with which many of us are familiar, but they are stories from the ramayana with powerful messages for central banking. the first story is about a lesser celebrated character in the ramayana, but incidentally the entire reason the epic ramayana was written. the first story is about shravan kumar. his life was one of devotion to his parents and this is what led to his death and triggered the chain of events that is the ramayana. the second story is about king dashrath whose karma and that of shravan kumar were inextricably linked. the third and fourth stories are about ram ’ s brothers, bharat and lakshman. the final story is about ram ’ s twin sons, luv and kush. shravan kumar ’ s story is applicable