Lately, various interpretations have been given to the monetary policy stance of the Bank of Mauritius. Five years ago, the Bank of Mauritius tightened its monetary policy stance with the rate of interest having gradually risen to high levels. The then prevailing conditions did warrant the tightening. It is commonplace that economies do undergo cyclical changes.
The same set of policies that is appropriate for a particular phase of the economic cycle may not necessarily be appropriate for a different phase of the cycle if the objectives of the Bank’s policies are to be achieved. That is why the Bank of Mauritius re-oriented its policy stance and brought about reductions in the rate of interest during the last two years.