Another is the alternative scenarios for the development of the economy that we describe in our Monetary Policy Reports to highlight the most important uncertainty factors we see ahead of us. These scenarios enable us to show in an easy-tounderstand and coherent manner how a particular development might affect monetary policy and our forecasts in general. None of this would have been possible without the developments in working methods, particularly in the field of modelling, that have taken place in recent years. These have created an entirely new flexibility and new opportunities in our methods of working and communicating. Technological advances and better tools create new opportunities When we make our forecasts for developments in the economy, we have a number of different tools at our disposal. We have the assessments made by experts in the different fields. We also have economic theories, past developments and various models on which to base our analysis. All of these components are important and they complement one another. Previously, we were often more or less forced to rely to a great extent on assessments rather on the more formal analysis. This provided some restraints. Now we have the technical possibility to make model-based forecasts for the economy that are coherent and based on different factors and markets being mutually dependent. If a particular variable changes, the entire system is adapted in the model simultaneously with the change. Perhaps our most important tool in this field is the general equilibrium model known as RAMSES.
Michael C Bonello: The Maltese lira Interview with Mr Michael C Bonello, Governor of the Central Bank of Malta, by The Malta Business Weekly, 9 December 2004. *  *  *  I must first of all point out that decisions regarding the external value of the Maltese lira can only be taken by the Minister of Finance on the recommendation of the Central Bank of Malta and with the consent of the Prime Minister. Decisions on such a complex, technical issue can have far-reaching economic and social implications and are understandably not taken lightly. They must, for that same reason, be made on the basis of facts not supposition. Having said that, I must make it equally clear that at this point in time the Bank cannot responsibly make a recommendation in this sense for the simple reason that it has no conclusive evidence that such a change is warranted, still less that it would deliver the expected benefits. Nor is the Bank aware that anybody else has made a credible case for changing the value of the currency. The conclusions of the Bank’s study on the equilibrium exchange rate have been shared with several local and foreign experts, including the IMF mission that was in Malta last May.