The Bank of Mauritius

Objectives of the bank

Initially, under the Bank of Mauritius Act 1966, the purposes of the Bank of Mauritius were to “safeguard the internal and external value of the currency of Mauritius and its internal convertibility and to direct its policy towards achieving monetary conditions conducive to strengthening the economic activity and prosperity of Mauritius.” The Bank of Mauritius Act 1966 was repealed with the enactment of a new Bank of Mauritius Act in 2004. The main purpose of the Bank of Mauritius in that Act evolved to that of maintaining price stability and promoting the orderly and balanced economic development of Mauritius.

The Bank of Mauritius is also responsible for the formulation and execution of monetary policy consistent with stable price conditions. There is a Monetary Policy Committee which formulates and determines the monetary policy. This committee sits under the chairmanship of the Governor.

Besides its primary objective, the Bank of Mauritius also has the responsibility to ensure the stability and soundness of the financial system of Mauritius as well as the regulation of credit and currency in the best interests of the economic development of Mauritius.

The Bank of Mauritius is independent. Its Board is not subject to the direction or control of any other person or authority. The Bank of Mauritius has to be transparent in the conduct of its operations and has also to act equitably and uniformly and in accordance with sound administrative principles.

Functions of the Bank of Mauritius

The functions of the Bank of Mauritius are directed towards the achievement of its statutory objectives. In particular, the Bank is entrusted, inter alia, with the responsibilities to:

  • Conduct monetary policy and manage the exchange rate of the rupee, taking into account the orderly and balanced economic development of Mauritius;
  • Regulate and supervise financial institutions under its purview, namely banks, non-bank deposit taking institutions, and money changers and foreign exchange dealers;
  • Issue currency;
  • Act as banker to the Government and to banks;
  • Manage the clearing, payment and settlement systems of Mauritius;
  • Manage the foreign exchange reserves of Mauritius;
  • Collect, compile and disseminate monetary and related financial statistics;
  • Advise the Government on financial matters;
  • Promote public understanding of the financial system and;
  • Maintain the Mauritius Credit Information Bureau.

The effectiveness of the role and functions of central banks in achieving the desired results depends greatly on the extent to which monetary policy and fiscal policy are co-ordinated.

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