Bank of Mauritius

Sub-region: 


 Governor 

 Mr Rameswurlall Basant Roi G.C.S.K

Headquarters Port-Louis
Established 1967
Currency Mauritian rupee - MUR (ISO Code )
Website www.bom.mu

 

The Bank of Mauritius was established in September 1967 as the Central Bank of the country. It was modelled on the Bank of England and was, in effect, set up with the assistance of senior officers of the Bank of England.

The setting up of the Bank of Mauritius marked the beginning of a new phase in the monetary history of Mauritius, with the monetary system moving forward from the stage of ’Sterling Exchange Standard’, under which currency was issued in exchange for sterling at a fixed rate of exchange, to that of a ’managed currency’ in which the discretionary role of the monetary authority becomes important.

Objectives of the Bank

The Bank has been set up as the authority which is responsible for the formulation and execution of monetary policy consistent with stable price conditions. It also has responsibility for safeguarding the stability and strengthening of the financial system of Mauritius.

The Bank of Mauritius Act 2004 stipulates that the primary object of the Bank shall be to maintain price stability and to promote orderly and balanced economic development.

Monetary Policy

The Bank of Mauritius has introduced a new framework for the conduct of monetary policy in December 2006. In this new framework, the Bank will use the Repo Rate instead of the Lombard Rate as the key policy rate to signal changes in its monetary policy stance. The Bank will set the Repo Rate and will regulate the supply of reserve money such that the overnight interbank money market interest rates move close to the Repo Rate. As has been the practice with the Lombard Rate, the Bank of Mauritius will issue a communiqué to explain its decision on the Repo Rate.

Functions of the Bank

The main functions of the Bank include:-

(i) Formulation and implementation of monetary policy
(ii) Issuer of currency
(iii)Banker to the Government and to banks
(iv) Provider of an efficient payment, settlement and clearing system
(v) Management of the public debt
(vi) Management of foreign exchange reserves
(vii)Regulator and supervisor of banks
(viii)Adviser to the Government on financial matters.

Since the establishment of the Bank of Mauritius, the Mauritian economy and the financial landscape of Mauritius have undergone considerable changes. Exchange control was completely abolished in July 1994. The exchange rate of the Rupee is determined by market forces. Interest rates are freely determined on the market. Direct credit control which served its purpose in the old days is no longer an instrument of monetary control.

In short, the Bank of Mauritius has moved away from a system of direct monetary control to an indirect method of monetary control. The functions of monetary management and the regulatory as well as the supervisory role of the Bank of Mauritius are intertwined, more so as the country has been increasingly integrated with the world economy. Against this backdrop of changes within the Mauritian financial system as well as those in the world financial system, the conduct of monetary policy and the regulatory and supervisory role of the Bank of Mauritius have become increasingly complex. The Bank of Mauritius is strongly committed to enhancing competition and efficiency in the financial system and ensuring its total integrity.

Consumer Price Index and Inflation Rate

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Mauritian rupee

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Mauritius at a Glance

The Republic of Mauritius, an island of a total area of 2,040 square kilometres, is situated in the Indian Ocean, approximately 2,400 kilometres off the south east coast of Africa, and lies just north of the Tropic of Capricorn. It owes its origin to volcanic activity. Mauritius has a maritime climate; it is hot and humid during summer, which extends from November to April, and dry during winter, with the coldest months being July and August. The island is vulnerable to cyclones from December through April.

Although known to Arab and Malay sailors as early as the 10th century, Mauritius was first explored by the Portuguese in 1510. It was subsequently colonised by the Dutch (1598-1710), French (1715-1810) and British (1810-1968) before independence was gained on 12 March 1968. Since then, Mauritius has been an independent sovereign nation within the British Commonwealth. On 12 March 1992, Mauritius proclaimed itself a Republic. The President is the Head of State but full executive power rests with the Prime Minister, who is the Head of Government. Mauritius has a stable democracy with regular free elections and a positive human rights record. The Constitution guarantees the independence of the judiciary. The currency of Mauritius is the Mauritian Rupee. English is the official language while French and Creole are widely spoken. Mauritius has a multiracial and multicultural society with Indo-Mauritian (68%), Creole (27%), Sino-Mauritian (3%) and Franco-Mauritian (2%) forming the different ethnic groups. As a political entity, the Republic of Mauritius includes, together with the island of Mauritius, the island of Rodrigues, Agalega islands and St. Brandon. The total population of the Republic of Mauritius as at 1 July 2009 was estimated at 1,275,323. The island is divided into nine administrative districts with Rodrigues forming the tenth. The capital and port of Mauritius is Port Louis.

Since its independence in 1968, Mauritius has successfully moved from a low-income, monocrop country, depending entirely on sugar, to a middle-income diversified economy with the textile and apparel industry, tourism, and financial services being the main pillars of economic activities. The Information and Communication Technology (ICT) / Business Process Outsourcing (BPO) sector and the seafood and aquaculture hub are emerging as new sectors of the economy with good prospects for the future. Through the setting up of centres of excellence, Mauritius is also aiming to position itself as a knowledge hub in the region.

Mauritius benefits from a highly skilled labour force and good infrastructure. It has sound macroeconomic policies, political and social stability and a market-based economy with a strong and dynamic private sector. Besides, the government’s development strategy has focused on encouraging trade and economic reforms and facilitating a strong business sector through an attractive blend of advantages offered to foreign investors. These have attracted considerable FDI from developed as well as emerging countries and contributed to the strong economic performance in the island over the last two decades. Thus, with few natural resources, a small domestic market and vulnerability to external shocks, Mauritius has achieved one of the highest per capita incomes in Africa, where it even ranks second. In 1968, Mauritius was, by all measures, a poor country with per capita income of US$200 and by 2008 per capita income has gone up to about US$7,000. Real GDP has, on average, grown by about 5 per cent per annum over the last two decades. In 2008, real GDP grew by 5.0 per cent and economic growth is forecast at around 2.8 per cent in 2009.

Mauritius’ membership of several regional groupings such as the Common Market for Eastern and Southern Africa (COMESA), Southern African Development Community (SADC), Indian Ocean Rim-Association for Regional Cooperation (IOR-ARC) and the Indian Ocean Commission (IOC) positions the island as a key interface between Asia and Southern and Eastern Africa. Mauritius has been diversifying its markets and promoting the production of capital-intensive and higher value added goods. In addition, a substantial amount of labour-intensive activities have been delocalized to neighbouring countries in the SADC and COMESA regions. Moreover, Mauritius is very active on the international diplomatic front manifested through its membership in a number of economic and political organisations. It is a member of the United Nations and is at the forefront of the African, Caribbean and Pacific (ACP) Group. Mauritius is also looking into possibilities of developing strategic partnerships with Member-States of the South Asian Association of Regional Cooperation (SAARC), the Association of South-East Asian Nations (ASEAN) as well as the Latin American countries.

The Mauritius Freeport (free-trade zone) was established in 1992 as a customs-free zone for goods destined for re-export. The government’s objective is to promote the country as a regional warehousing, distribution, marketing, and logistics centre for Eastern and Southern Africa and the Indian Ocean Rim.

The Bank of Mauritius was established in September 1967 as the Central Bank of the country. It was modelled on the Bank of England and was, in effect, set up with the assistance of senior officers of the Bank of England. The Bank of Mauritius is a member of the Eastern Africa Sub-Region of the AACB. Mauritius has a sound and dynamic financial system. The entry of new banks and the expansion of the local and regional branch network of existing banks have injected a new dynamism in the banking industry. The stage has already been set for the provision of Islamic banking and financial services, which represents a new window of global business opportunity for Mauritius.

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Meeting of Governors of the AACB, Eastern Africa Sub-Region

Central Banks: 

The 7th Meeting of Governors

REPORT OF THE 7TH MEETING OF GOVERNORS OF THE ASSOCIATION OF AFRICAN CENTRAL BANKS (AACB), EASTERN AFRICA SUB-REGION

PORT LOUIS MAURITIUS - JULY 16-17, 2008

 

Governor’s Speech - 15 July 2008

The Triumph of Hope?
Opening Address Mr Rundheersing Bheenick Governor Bank of Mauritius

 

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The 8th Meeting of Governors

Report of the 8th Meeting of Governors of the AACB, Eastern Africa Sub-Region

MORONI COMOROS - AUGUST 5, 2009

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Publications

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Selected Economic Indicators

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