Sir Alan Budd is in Mauritius to review the functions of the Monetary Policy Committee (MPC)

Prominent British economist Sir Alan Budd is in Mauritius to review the functions of the Monetary Policy Committee (MPC). Sir Alan was invited by the Bank of Mauritius (BOM) to conduct a review of the composition, methods and procedures of the MPC.

During an inter-action session with the media yesterday, BOM Governor Rundheersing Bheenick said he expects “the review to lead to a stronger and more transparent MPC, with greater focus on the real economy and its intricacies”.

He also expects that the review will “clarify the role of the central bank in preserving macroeconomic and financial stability”.

The MPC was established on April 23, 2007 under sections 54 and 55 of the BOM Act 2004 to formulate and determine the monetary policy to be conducted by the Central Bank. 

The MPC meets on a quarterly basis, and so far has met on 19 occasions. The last meeting of the MPC was on December 6 last year and its 20th meeting is scheduled for March 28.

Sir Alan wanted to have the opinion of journalists on the functioning of the MPC and its method of reporting. The appointment of members of the MPC by ministers, the absence of MPC members around the governor when he conducts a press conference, the absence of publication of minutes of proceedings, a lack of transparency and the independence of the Central Bank were the main issues raised by the media.

Speaking about his own experience as a former member of the Monetary Policy Committee in England, he said that it consists of nine members. The MPC met once a week and its deliberations were announced at noon on the same day of the meeting.

“Sometimes they issue press releases,” he said. Two weeks after the meeting, the minutes of proceedings are published but the comments are not attributed. However, the votes are not anonymous as the names of the members are also published when they vote.

“Everyone knows who votes what,” Sir Alan said. Once every three months, the MPC in England publishes an inflation report.

By Clifford Vellien