Allow me now to dwell a little on the challenges that a small country like Mauritius is currently facing in the conduct of monetary policy. Today, the Bank of Mauritius finds itself confronted with the important challenge of reducing the rate of inflation, which stood at 9.0 percent at the end of February 2008, and preserving the competitiveness of the export-oriented sectors.
And we must meet this challenge against a backdrop of unprecedented capital inflows which are driving up the exchange rate of the rupee. With globalization, a small open economy receiving such large capital inflows faces the daunting task of managing these external flows to ensure macroeconomic and financial stability.