Monetary policy Over the 1970s and 1980s, monetary policy, as we know it, had become almost non-existent: with a system of credit allocation, administered and different interest rates for different purposes; automatic monetization of fiscal deficits; and financial repression through pre-emption of banks’ resources. Hence a number of measures had to be taken.
A few international banks are actually engaged in promoting this business. The Bank of Mauritius stands ready to support such initiatives. A drop in GBC deposits would deprive the country of foreign exchange inflows for the financing of the current account deficit. The Bank had feared that a drop in GBC deposits would adversely impact on the liquidity positions of banks.