Mauritius Central Bank Statement

Author: IFLR Correspondent | Published: 24 Sep 2019
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The various policy initiatives taken by Mauritius in recent years have supported further consolidation of its economy. A rethink of its economic strategy, in the face of challenges posed by staunch foreign competition in long-established sectors, and a review of agreements with key jurisdictions are gradually yielding positive results. These range from reinforcing the positioning of Mauritius as the international financial centre of choice for investment into Africa to the diversification of exports markets. The initiatives have also spurred enhanced business facilitation and extensive investment in public infrastructure.

The economy is performing well, supported by commendable business and consumer confidence, with an expected growth rate of 3.9% in 2019. However, recent global economic developments could curtail some of the thrust. Inflation and the unemployment rate are at historically low levels. The accommodative monetary policy stance is contributing towards sustaining growth and price stability. The right mix of policy measures continues to attract capital inflows. The overall balance of payments has benefitted from the capital inflows and registered sustained surpluses, despite an external current account balance that has been in negative territory for quite some time.

The broadly prudent stance adopted by the financial sector regulators has fostered a sound and stable financial system. Banks are well-capitalised and have comfortable liquidity buffers, in line with the Basel III requirements. The risk-based supervisory framework currently under implementation integrates a comprehensive module on anti-money laundering and combating the financing of terrorism (AML/CFT). Several ongoing projects will further improve supervisory and regulatory efficiency.

As a testament to the country's focus on reinforcing the financial sector's legal framework and enhancing its resilience, new laws are now in force pertaining to the ombudsperson for financial services, the deposit insurance system, the national payment system and the AML/CFT regime. The Bank of Mauritius is working towards establishing the Mauritius Deposit Insurance Corporation by the end of 2019. It is also collaborating with the Financial Services Commission, the regulator for non-bank financial institutions, and other stakeholders on the Centralised KYC Registry and other pivotal projects.

A firm proponent of technology, the Bank of Mauritius is actively modernising the financial market infrastructure and embedding best international payments systems practices. The Bank of Mauritius launched the Mauritius Central Automated Switch in August 2019, a digital hub for routing retail payments among operators on a 24/7 basis. This platform will enable operators and fintech firms to provide instant payment and value-added services through conventional as well as innovative channels. To complement its vision of a digital payments system, the Bank of Mauritius is presently brainstorming on the introduction a digital currency.

The various projects are transforming the overall financial landscape and bolstering the attractiveness of the jurisdiction. The Bank of Mauritius is well on course with its vision to forge a strong reputation for the banking sector and to set Mauritius up as a reference point for international financial centres.