The Bank of Mauritius was established in September 1967 as the central bank of Mauritius. 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.
Before the establishment of the Bank of Mauritius, the currency issue was managed by a Board of Commissioners of Currency – the first of its kind to be set up in the world. The duties of the Board were restricted to those of an issuing authority.
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.
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 The Bank of Mauritius Act 1966 was repealed with the enactment of a new Bank of Mauritius Act in 2004.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.
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