ANNUAL REPORT YEAR ENDED 30 JUNE 2019 ContentsStatement From The Governor 1 5 3 41 13 75 99 111 211 211 131 210 123 189 208

Financial Statements Regional Cooperation and International Affiliation International and Cooperation Regional Payment and Settlement Systems and Currency Management Settlement and Currency Systems and Payment Financial Markets Developments Markets Financial Regulation and Supervision and Regulation About Bank of Mauritius Review of the Economy

7 6 6 5 4 4 3 3 1 2 Appendices List of Charts List of Tables List of Acronyms Letter of Transmittal Governor the from Statement Statement From The Governor 2 Letter of Transmittal 3 Port Louis Yours sincerely Yours 29 October 2019 29 October Bank of Mauritius Bank of Mauritius Yandraduth Googoolye Yandraduth Annual Report 2018-19 Accounts and Audited Dear Prime Minister herewith I transmit 2004, of Section 32(3) of the Bank of Mauritius Act with the provision In accordance the fifty-secondfor Accounts of the Bank Report Annual the audited of the Bank, which also contains ended 30 June 2019. the year The Governor Jugnauth Kumar Pravind The Honourable Prime Minister Communications External of Home Affairs, Minister Unit and National Development of Finance and Economic Development Minister Office Prime Minister’s Building Treasury New Street Intendance Port Louis Governor, Bank of Mauritius Governor, YANDRADUTH GOOGOOLYE YANDRADUTH

Statement From The Governor 04 Statement From The Governor 5 the global financial crisis in 2008. This situation is further 2008. This situation financial crisis in the global concerted and of pre-emptive the lack by exacerbated of a recession. the likelihood reduce to measures positive, The domestic momentum remained economic recent but business confidence, buoyant supported by off could knock some developments global economic per 3.8 at forecast is growth GDP Real thrust. the of sustained supported by 2018, same as for cent in 2019, a significant rise in and growth household consumption be continued to demand external Net public investment. outlook The growth on domestic economic activity. a drag risks downside to is subject in the short medium-term to the tensions, the escalation of the trade arising mainly from and heightened a no-deal Brexit, war, of a currency risks factors These markets. financial volatilityinternational in our export demand for on external negatively could impact of goods and services. With the level. low is at a historical rate The unemployment the unemployment performance of the economy, resilient to and is estimated trend its downward maintained rate cent in 2018. 6.9 per from 6.8 per cent in 2019, decline to in line with broadly were expansion Monetary and credit output. in nominal the growth numerous face to continued exportThe sector of our external the erosion ones being challenges, the key from delocalisation of production competitiveness, locations, and weakening cost-effective more Mauritius to It is a in major exports markets. economic prospects exports of net of goods that the ratio of concern matter is The ratio and services persistently. GDP is worsening to compared per cent in 2019, 15 negative reach to forecast and reforms Structural per cent in 2016. 10 nearly to in productive investment direct foreign attract to measures the rekindle to the strategy to prerequisites are sectors export sector. in to deteriorate account deficit continued The current per cent 5.7 to 2017-18 4.6 per cent in from It rose 2018-19. caused deficit trade widening to due in 2018-19, GDP of imports. The rising infrastructure-related essentially by the remain elements in the balance of payments positive on the primary income account, recorded surplus healthy that account and financial on the capital inflows the and account deficit. to finance the current sufficient amply were of Rs17.5 a surplus recorded The balance of payments billion in 2018-19. amid the supportiveMonetary of growth, policy remained The MonetaryPolicy Committee inflation environment. low and unanimously times in 2018-19 four (MPC) convened at 3.50 per unchanged the policy rate maintain decided to of resilience the reflected decision The annum. per cent at However, inflationary and low the economy pressures. majority the MPC decided by meeting, vote 2019 its August 3.35 to points basis 15 by (KRR) Rate Repo Key the cut to against the measure per cent per annum as a pre-emptive The deterioration in the global growth outlook, amid low outlook, amid low in the global growth The deterioration banks across central led many price pressures, underlying their monetary policy stance. For reassess to the world Open Market Federal the US years, 10 time in the first at its July funds rate federal cut the to opted Committee 2019. September in subsequently and meeting, 2019 unchanged in its policy rate maintained Whilst the ECB cut in September basis points a 10 to it resorted 2018-19, -0.5 per cent and plans to to deposit rate bringing its 2019 November scheme as from its quantitative-easing restart the Bank of England judged that a In contrast, 2019. of monetary necessarytightening was policy in August inflation and has since of higher-than-target in view 2018 their part,central For unchanged. many rate policy its kept and market and emerging advanced other banks across in 2018- of policy rates a reduction to economies resorted in an effort thwart effects of a slowdown. to the negative 19 for much less room have that policymakers It is evident had during than they a recession avert to today manoeuvre In the light of these developments, major international major international In the light of these developments, projections growth their global scaled down organisations 2020. In its October caution for while expressing 2019 for Economic Outlook, the IMF further revised World 2019 3.0 per cent, to 2019 for global economic growth down IMF has, however, The 3.3 per cent in April 2019. from in 2020 with a recover to the global economy projected of of 3.4 per cent in 2020, on the assumptions growth further tensions, monetaryabating trade policy easing and sentiment. supportive financial market Economic performance diverged among major economies Economic performance diverged relatively was States in the United Growth and regions. procyclical supported by much of 2018, through strong domestic fiscal policies and employment-boosting the end towards it started moderating demand. However, Kingdom, and the United area In the Euro of the year. downside with growing weak relatively was growth of likelihood increased an mainly from stemming risks tensions trade over and concerns Brexit a disorderly further slowed in China the US and China. Growth between environment uncertainties external the in increased amid in major and softer domestic demand. The slowdown country-specific economies, also due to factors, emerging in resulting global growth their contribution to moderated partners. effects on trading second-round adverse The global economic landscape in 2018-19 was marred marred was in 2018-19 economic landscape The global uncertainty tensions, of trade an escalation about the by Uncertainties and geopolitical tensions. surrounding Brexit, volatility elevated only led to not these developments of revisions downward in successive but also resulted activity manufacturing Weaker projections. global growth combined economies, advanced in trade sluggish and in demand external lower and subdued investment with on global economic weighed have economies, emerging activity. STATEMENT FROM THE GOVERNOR STATEMENT plans to roll it out in 2019-20. The new framework would would framework new The in 2019-20. it out roll plans to the and set market the money dynamism in infuse greater yield curve. benchmark reliable a more basis for the improve to measures is considering various The Bank exchange activityforeign and bolster efficiency on the include the adoption initiatives Some of these market. participants, greater market by Code FX Global the of markets, and swaps forwards on the spot, transparency exchange foreign on the operations our reviewing and up activity on the prop to envisaged The steps market. support the considerable to provide will also market money its development. stimulate and market exchange foreign is expected market exchange the foreign Going forward, and best practices the lines of international along evolve to managing for operators opportunities market offer better to risks. rate open positions and hedging exchange net exchange intervene on the foreign The Bank continued to rate volatility exchange the of excessive contain to market macroeconomic reflects rate the exchange ensure and to largely emanated pressures Currency fundamentals. particularin volatilitythe major of factors, external from evolved rate The exchange currencies. international As fundamentals. macroeconomic with line in broadly also intervention policy the IMF, the by recommended reserves exchange the country’s foreign aimed at growing further against shocks. to build the country’s resilience of US$465.9 total a purchase The Bank intervened to the Consequently, in 2018-19. the market million from rose reserves international official of gross country’s level to billion (equivalent at US$7.2 stand US$0.5 billion to by The almost one-year Rs253 billion) as at end-June 2019. insulation against a solid represents of import cover level shocks. external adverse its foreign the Bank has revamped years, the pastfew Over and shifted management processes reserves exchange multi-asset diversified, to a more assets fixed-income from the establishment to portfolio. This shift concurrent was as a more management framework, reserve of a robust posed inevitably process management dynamic reserve reserves of the the official protect challenges. To several the and in line with the Bank of Mauritius Act, country, of security, objective that the threefold Bank ensures times at all to adhered is irrevocably liquidity and return also are objectives These three of priority. and in this order three of the portfolio into a segregation supportedthrough and liquidity, capital, working comprising distinctbuckets As part strategy, tranches. of its diversification investment during managers tier external top the Bank on-boarded manage part These to the reserves. of and 2018 2017 global insights into valuable share managers external The portfolio performance has and trends. developments diversified. well now are and risks improved improve experts to The Bank is engaging with external has as this exercise the management of its balance sheet, the Managing implications. macroeconomic wide-ranging I have to highlight that mopping up the excess liquidity from liquidity from highlight that mopping up the excess to I have monetarythe The Bank. the very been has costly to system an cost of conducting monetary to total policy escalated This represents all-time high of Rs3.5 billion in 2018-19. this Despite 2017-18. of 45.8 per cent over an increase the cost in monetary of operations, increase substantial year under of Rs84the million in a profit the Bank realised loss of Rs444 a net last million year. to compared review market money cost,bringing high such Notwithstanding improving to is paramount in line with the policy rate rates Following efficiency of monetarythe operational policy. of monetary the successful shift target in the operational of upgrading in the process the Bank is currently policy, monetary for policy and framework operational its overall The Bank pursued its smoothing exercise to mitigate mitigate to exercise its smoothing The Bank pursued of Mauritius of Government tender in the weekly variations securities yield curve for a reliable have Bills and to Treasury It issued Bank of Mauritius Bills at a weekly benchmarking. government by covered and in maturities not frequency worthbillion Rs95.6 of amount Bank of total A instruments. issued, of which Rs45.6 billion in the of Mauritius Bills were short-lived episodes, the 91- a few for Except tenor. 91-Day between the KRR, ranging close to Bill yield hovered Day most of the time in 2018- per cent for 2.93 per cent and 3.61 the structural address 3.33 per cent. To and averaging 19 the to the Bank also had recourse liquidity, excess rupee from securities in maturities ranging issuance of long-term billion. Special deposits of Rs12 a total for 4 years 2 to banks, including mobilised from billion were Rs12.8 totalling The Rs5.3 billion. of proceeds intervention of sterilization nearly by rose securities Mauritius of Bank outstanding at end-June billion of Rs116 peak a reach billion to Rs24 2019. I had, since 2018, emphasized the importance a shift emphasized for in I had, since 2018, overnight the from monetarythe target, operational policy yield. This change Bill the 91-Day to rate interest interbank rates Short-term interest results. positive has generated the KRR. The close to anchored subsequently were to operations open market conducted Bank successfully levels liquidity rupee within reasonable excess maintain of monetary the transmission policy to improve so as to volatility in and minimise excessive rates interest market IMF Article IV Consultation short-term yields. The 2019 commended the Staff in April 2019, Report, released of level the contain effortscontinued to Bank the by 2019, liquidity In September in the banking system. excess Bill to Bank of Mauritius the 28-day the Bank introduced further fine-tune liquidity management. risks associated with weakening global growth. Inflation global growth. weakening with associated risks 1.0 reaching 2018-19, in course downward a on stayed at 0.5 per remain to is forecast It in June 2019. per cent risks, inflation of low view In end of 2019. cent at the maintained monetary accommodative were conditions assist credit to expected These are rates. interest via low sectors the household and corporate both for expansion economic activity. as supportas well overall

Statement From The Governor 6 Statement From The Governor 7 assets, banks have established liquidity back-up plans liquidity established back-up banks have assets, regular Bank conducted situations. The emergency for liquiditythe of tests situation of banks. funding and stress fully are that banks demonstrated so far have The results of funds. erosion potential to resilient end-June 2018 qualityBanks’ asset unchanged from was sound. be to considered and is generally end-June 2019 to loans total non-performing loans (NPL) to of gross The ratio sectors in key credit constant at 5.5 per cent. Impaired was tourism, construction, such as of the domestic economy 43.4 per cent of to improved sectors trade and personal Mauritius as at end-June 2019, in credit impaired total the level ago. Reducing year 50.8 per cent a compared a Guideline Bank released The task. of NPLs is no easy up their clean banks to encourage to 2018 in November Though assets. eliminating impaired by balance sheets profitability on banks’ impact adversely may this practice dividends in the longer run. in the short it will pay term, prudential several management, NPLs proactive foster To pertaining related-party upgraded, to guidelines were and income measurement impairment credit transactions, risk. concentration and credit recognition, with the Mauritius the Bank collaborated 2019, In March to Deloitte and (MBA) Limited Association Bankers Financial Officers Chief session for a training organise banks on the MBA member from Officers and Chief Risk of IFRS9. This partnership of the adoption implications on the are that all stakeholders It showed a success. was forward no ambiguity is way on the same page and there of IFRS9. the full implementation regarding and on the modernization working The Bank is actively and supervisoryconsolidation of its regulatory framework. under during the year The Bank has made good progress Bank and it is the World from with assistance review to approach compliance-based a from moving smoothly supervisorya full-fledged risk-based Results framework. that the model show stress-testing the Bank’s from but plausible- severe- to resilient remains banking system as such factors shocks arising from macroeconomic well as from fluctuations, as rate and exchange interest III Basel of non-performingimplementation The loans. capital to overlay adds a macroprudential framework buffer by as supplemented in a phased manner, adequacy conservationmechanisms, such as the capital buffer. a capital to subject Systemically-important banks are externalities of the significant negative in view surcharge in case of failure. generate would they a thorough The banking legislation is undergoing crisis it and incorporate upgrade The aim is to review. It is and management among its provisions. resolution prominently feature will issues resolution that expected of supervisory guiding the very nature in frameworks those banks engaged in cross- conduct, including for on the soundness of Information transactions. border regulators with foreign exchanged banks is regularly The banking sector remained healthy, with the average with the average healthy, remained sector banking The and Common Equity Tier ratio 1 ratio adequacy capital per cent as at per cent and 17 19 to rising respectively In addition, banks hold comfortable end-June 2019. Ratio Liquidity Coverage liquidity The aggregate buffers. and banks are per cent as of June 2019, 246 was (LCR) of 100 the higher mandatory meet threshold to prepared holding high quality 2020. In addition to liquid per cent by Several far-reaching measures were taken to further to taken were measures far-reaching Several and Over the financial industry’s ecosystem. consolidate financial sector the overall continuously upgrading above the industry for the legal framework regime, regulatory with the enactment of a number of pivotal reinforced was Act Systems the National Payment legislations. These are Financial Services for 2018, Ombudsperson the Act 2018, 2019. Scheme Act Mauritius Deposit Insurance the and the protection important for milestones are These laws services, and will and products financial of consumers of systems. in payment innovations for also provide It is important to highlight that the Board of Directors of the of Directors It is important highlight that the Board to decide on the to responsibility the ultimate Bank will have of the cost of the repayment meet the SRF to from transfer debt obligations. The determination external government’s will be based on the be transferred amount to of any increasing Bank for the of requirement funding estimated the cost of monetary meeting operations and for its capital to will thus have The Bank future. the foreseeable over adequate mustering at all times by policy solvency ensure economic capital. The decision of the government, as announced in the as announced in the government, The decision of the use of the Special make Speech, to Budget 2019-20 debt obligations the external repay (SRF) to Reserve Fund significant debates. had prompted government of central the that the amendment to the public me reassure Let infringe on the Bank’s not will 2004 Act Bank of Mauritius the recognised clearly independence. The government importance bank and made of an independent central to stringent conditions prior to the use of the SRF subject of the Section 47(5) under down laid as disbursement, any the SRF should Specifically, 2004. Bank of Mauritius Act position and, capital the Bank’s to strengthen be used first the cost of meet to of the Board, approval the to subject the can it be used for monetary Only thereafter operations. debt obligations, external government of central repayment affect adversely to likely that this is not “provided that too by the Bank of its functions.” the efficient discharge balance sheet of the central bank is manifestly fraught with fraught bank is manifestly of the central balance sheet and high assets on external returns with low challenges, On current times. cost of monetary in current operations to is expected of liabilities stock large the Bank’s trends, its improves furtherBank the as forward going rise even to It is essential monetary framework. policy operational strong remains sheet balance bank’s the central ensure its policy goals effectively it can achieve time and that over fulfil public confidence. to guarantee to eligible depositors the compensation of their of their compensation the depositors eligible to guarantee bank failure. case of limit in a given to deposits up The Bank has also been an active participantThe Bank has also been an active National in the first Mauritius. The “National for Assessment (NRA) exercise Risk Assessment Financing Risk Laundering and Terrorist Money of Mauritius” (NRA Report), the Ministry published by of in collaboration Financial Services and Good Governance Laundering and Anti-Money for with the National Committee Bank the World and Combating the Financing of Terrorism guide to information valuable provides 2019, in August Group the operational financial institutions efforts their in to address terrorism laundering, money fighting in face they challenges other financial crimes. financing and To improve technical compliance with the Financial compliance technical improve To on AML/ Recommendations (FATF) Force Task Action 2004. our Banking Act to brought were amendments CFT, section a specific 2018, These include, since August Laundering and Terrorism of Money on “Prevention on our Guidance Notes front, Financing.” On the regulatory in the light of the being reviewed presently AML/CFT are landscape. The AML/CFT changes in the legislative recent financial institution on the need for Guideline will also focus AML/CFT. to approach a risk-based implement to The Bank endorses and participates and endorses The Bank effort in the national financing terrorist and laundering (ML) fight money to particularly(TF), aftermaththe in Evaluation Mutual the of ReportAfrica Anti-Money and Southern of the Eastern areas which highlighted (ESAAMLG) Laundering Group closely with The Bank is working attention. urgent requiring actions all the recommended meet to stakeholders other Mutual in the Assessors the ESAAMLG by enumerated Report. the Bank is reengineering In parallel, Evaluation a risk-based of developing capabilities in terms its internal assessment and supervision ML/TF risk for of framework Supervisionall its licensees. The Department up has set banking the in risks ML/TF monitor unit to dedicated a off-sitesurveillance on-site as well as through sector examinations. between of Understanding A tripartite Memorandum Financial Servicesthe Bank and the the Commission, 2018 September signed in Unit was Intelligence Financial and matters cross-sectional on cooperation strengthen to foster To fight financial crime. to closely collaborate to effectiveness actions and enhance coordinated synergy, held are meetings regular authorities, among the three and reviewed are common interests of matters whereby discussed. of cooperation the reinforcement also marked This year a through Force Police the Bank and the Mauritius between that outlines the framework of Cooperation Memorandum illicit and crimes combating financial in cooperation for financial services the Mauritius to sector. activities relating the and Bank the between meeting first a thereto, pursuit In enhance collaboration to 2019 held in August was Police matters. on different The Mauritius Deposit Insurance Scheme legislation was Scheme legislation was The Mauritius Deposit Insurance Presidential It received 2019. in March Parliament by approved A dedicated be proclaimed. to but is yet Assent in April 2019 on the establishment of working the Bank is actively at team will be Scheme. This project the Mauritius Deposit Insurance to is in the financial landscape, as its objective a landmark It is a privilege for the Bank that Mr Mardayah Kona Kona that Mr Mardayah the Bank It is a privilege for one of our long-servingwas officers, Yerukunondu, Financial Services for as Ombudsperson in appointed Ombudsperson enactment of the the following 2019 March the of Office The ServicesFinancial 2018. for Act Financial Services for Ombudsperson serves as the of financial consumers from complaints point for focal for services. Office is a milestone The establishment of this resolution. complaints fast-track and consumer protection seconding two by The Bank has supported this initiative Services Financial for assist Ombudsperson to the officers Office. established up this newly in setting with the Financial its collaboration The Bank is pursuing Registry. KYC Services establish a Central Commission to centralised a standardised Registry, KYC The Central KYC available and make will collect database, online KYC both customers, corporate and individual on information institutions of financial that and non-residents, residents undertaking each KYC a fresh the need for will eliminate It will thus financial products. new for opt time customers services financial and costs on both the burden reduce authorities have regulatory Both and customers. providers to regulatees engaged in discussions with their respective of in the implementation their requirements on board take The possibility KYC the Registry. the Central of connecting is of the Government platform Registry the InfoHighway to also under consideration. In May 2019, the Bank of Mauritius and the Central Bank Central the Bank of Mauritius and the 2019, In May in resulted session which held a brainstorming of Kenya central two the between cooperation closer and stronger on banking sector banks. The discussions focussed payment AML/CFT, developments, Fintech matters, banking central management and other reserves systems, Bank with the Central issues. I hope that our collaboration among cooperation more even the path for will set of Kenya banks in the region. central A new player joined the banking sector in March 2019. 2019. in March banking sector joined the player A new the activities of over Ltd took The BCP Bank (Mauritius) its part, Ltée. For Deutsche des Mascareignes Banque its banking licence surrendered Bank (Mauritius) Limited to strategy as part of the group’s on 6 December 2018 its global activities. streamline for cross-border operations of local banks as well as for for as well banks as of local operations cross-border for of international and subsidiaries of branches operations signed The Bank has in our jurisdiction. banks operating countries foreign with Understanding of Memoranda 17 regular for These allow domesticin which operate. banks through banks central other with exchange information supervisory colleges.

Statement From The Governor 8 Statement From The Governor 9 To help stakeholders better understand the significance the significance understand better stakeholders help To financial of consumers decisions and educate of policy initiatives. literacy its financial the Bank pursued products, an to invited regularly Students are visiting the Museum In bank. the central of on the role session explanatory Bankers Mauritius the with partnered Bank the 2019, June a financial organise to Trust Ltd and the Media Association of its the first business journalists, for programme literacy helped the target session training This kind in the country. and mandate core Bank’s the audience comprehend reserve of monetary their understanding policy, improve management, supervision, AML/CFT and the significance received feedback damage. The positive of reputational participants host such the Bank to persuaded from regularly. sessions more Two of my key priorities have been to modernise the modernise been to priorities have key of my Two to operators incentivise and infrastructure system payment channels as in advanced payment the public similar offer to with the 2019, August since 14 countries. This is a reality platform This Switch. launch of the National Payment (Mauritius as MauCAS and branded the Bank by created a 24/7 will operationalise Switch) Automated Central This innovative the country. for system payment digital and mobile banking, e-commerce makes platform digital cashless means and encourages interoperable payments of payment. commitment Bank’s of the is an illustration MauCAS payments secure and innovative an fostering towards made possible was up of MauCAS setting The ecosystem. Act Systems Payment National the of enactment the with enforce to which the Bank is responsible in January 2019, safe, channels remain that the payments sure and make the right and embrace with best practices, compliant are technology. (IPS) System the Instant Payment also comprises MauCAS effect to which, as its name suggests, enables customers with their mobile phone and through instantly payments with the European channels. In accordance digital other Services Payment Directive revised Bank’s Central open up their (PSD2), the Bank is incentivising banks to instant APIs. APIs will allow through banking systems core or information transaction bank accounts for access to on to leverage will thus be able firms Fintech purposes. value provide bank accounts to access to such direct added services the opportunity and banks will have to technologies. of emerging with providers collaborate The United Nations (Financial Prohibitions, Arms Embargo Embargo Arms Prohibitions, Nations (Financial The United on 29 force came into 2019 Ban) Sanctions Act and Travel to enable the government is to Its main object 2019. May imposed measures sanctions and other targeted implement threats Nations Security address the United Council to by others. amongst terrorism and the financing of terrorism to I am a member of the National in the law, As prescribed participated in the first and I have Sanctions Committee 2019. August held in early of the committee meeting meeting of the Financial meeting General Assembly in July General th th Governing Board and the 9 and the Board Governing Ordinary Meeting of the Governors and represented the and represented Governors of the Ordinary Meeting th th The Bank of Mauritius Museum welcomed more than more The Bank of Mauritius Museum welcomed technology The use of interactive in 2018-19. 8,000 visitors in Mauritius of currency evolution the historical present to active The Museum was visitors. by highly appreciated was 22 April to and, from of national heritage as custodian for Day it participated in the International 26 April 2019, with the Ministry in collaboration Monuments and Sites and the Fund the National Heritage of Arts and Culture, participation The Museum’s a was Ministry of Tourism. visitors. 1500 over success, welcoming Stability Board Regional Consultative Group for Sub- for Group Stability Consultative Regional Board Seminar Continental as the AACB well Africa as Saharan and Staff participated in conferences 2019. in May such as in sub- and global level, regional at both meetings, blocs, the regional and SADC of the COMESA committees Supervisors, Islamic Centre Finance of International Group name a few. Financial Services to Board sub-region at the AACB Annual Meetings held in Egypt in held in Egypt Annual Meetings at the AACB sub-region capacity In my of the Governing as Chairman 2018. August Islamic Liquidity Management the International of Board issuing Islamic body engaged in (IILM), a supranational liquidity management by facilitate liquidity to instruments of the the meetings Islamic banking institutions, I chaired 20 The Bank remained active on the regional and international and international on the regional active The Bank remained of the Africa Sub-region of the Eastern As Chairman fronts. the I hosted Banks (AACB), Association of African Central 18 To promote compliance at the level of its regulatees, of its regulatees, level at the compliance promote To AML/ on and outreach communication for platform a taking deposit non-bank for up been set also has CFT money and dealers exchange institutions,foreign platform with the existing together platform, This changers. the Bank between further will allow banks, interactions for its share to Bank enable the also will It licensees. its and supervisory dialogue constant maintain and expectations with its licensees on AML/CFT issues. In a follow-up Mutual Evaluation ReportIn a follow-up in April published Evaluation Mutual made Mauritius has concluded that the ESAAMLG 2019, compliance technical the resolving in progress significant successful subsequently shortcomings. was Mauritius out of 11 Re-rating Compliance Technical a in obtaining Mauritius 2019, September In recommendations. 12 of Technical for in its application again successful was These Recommendations. on 19 re-rating Compliance commitment of the unflinching to bear testimony initiatives standards. with international comply our jurisdiction to The Bank is committed to enhance regional economic and enhance regional to The Bank is committed furtherance in working of actively It is integration. financial Bank of Central Committee of the COMESA the objectives Bank Governors of Central and the Committee Governors the 15 It also hosted in SADC. 2018. I also chaired an Extraordinary Governing Board Board Governing an Extraordinary I also chaired 2018. 2018. of the IILM in September meeting 29 October 2019 29 October Yandraduth Googoolye Googoolye Yandraduth I believe that some of the contemporary central banking central contemporary the of some that believe I human well-trained with can be addressed challenges our Indeed, technology. grip on and a firm resources tackling for mostour importantpeople constitute resource in constant ahead in a world that loom the challenges bankers central prepare better In a bid to mutation. with the IMF collaborated we region, the African across run to Institute IMF Africa Training South and AFRITAC Newly-Recruited for Programme “Orientation a one-week from Drawing 2018. in October Bank Officers” Central case studies activities on the and practical theoretical both gave banks, the programme of central and responsibilities introduction banks a thorough of central recruits the new initiative this of success The banking. central modern to on a experience this repeat to organisers the convinced basis. regular initiated I have of a performance-based culture, In pursuit Management the Performance of reviewing the process staff two members (PMS) at the Bank. I deputed System Malaysia at the Bank Negara a study visit in April 2019 for on the Work in this area. which has a rich experience on course. the PMS is well upgrading supporting to sustained committed remains Bank The of the country and development by economic growth It is continuously price and financial maintaining stability. of its staff set the skill whilst also harnessing upgrading efficiency, enhance work tasks, streamline to technology fulfil better to its approach reengineer and progressively towards working is resolutely functions. The Bank its core economy. a digital Mauritius into transforming Jugnauth, Kumar Pravind I thank the Honourable and Economic of Finance and Minister Prime Minister supporting for the Bank in its efforts Development, to the also goes to serve My gratitude the country. better On Deputy two my Governors. and to of Directors Board Deputy First Governor, former our thank to wish I note, that contribution his invaluable for Padayachy, Dr Renganaden his during projects key of number a fruition to bringing in of office at the Bank. tenure of the Bank I must also thank each and every employee support the unflinching of Mauritius, for and laudable Bank. I fulfilling the functions of the commitment towards CEOs the MPC Members, to appreciation my extend equally with of banks and financial institutions and all stakeholders year. the financial across whom the Bank has interacted The Bank has pursued its efforts to achieve a fairer and a fairer its effortsThe Bank has pursued achieve to the implementation through banking sector inclusive more Future of the Banking Your of the recommendations the Report in January Since I revived Report of June 2014. in the report recommendations of the 100 several 2018, These recommendations, been implemented. have aim at bringing about more January as from 2019, effective more providing and charges, fees around transparency and services as simplifying on products as well information the language and style the benefit of bank documents for is The Bank at large. and the public of bank customers the implementation with banks for in discussion currently recommendations. of the remaining In December 2018, the Bank introduced the Rs2,000 the Bank introduced In December 2018, The new circulation. into denomination polymer banknote of the Rs2,000 paper is an upgrade polymer banknote as the paper the same design It has maintained banknote. on based enhanced security but has features banknote cleaner are banknotes Polymer securitynew technology. than paper banknotes. durable and more The Bank has recently embarked on an IT transformation on an IT transformation embarked The Bank has recently This initiative all levels. at its operations digitalise to project technologies and will the benefits of the latest into will tap With era. the digital into banking operations central propel the envision we in coming years, of this project the roll-out the help will that IT system of an integrated development its goals. in achieving Bank act proactively We recognize that the implications of Fintech might not might not of Fintech that the implications recognize We non-experts and the public, as by understood be readily to still at a nascent stage and tend applications are many staff of the Bank up our resources, beef To be complex. opportunities participate given in regional to regularly are can so that they programmes training and international has Committee The Fintech build expertise in Fintech. so as to programmes outreach devise to been mandated technologies. of new sensitise the public on the impact I have engaged discussions with several international international discussions with several engaged I have the possibilitythe Bank to for explore institutions to The Currencies. Bank Digital with Central experiment developed of concept proofs will leverage experiment available as currently as well banks central other by Mauritius steer is to The vision of the Bank technology. cash-dependent and that is less economy an towards strivingand digital safe of a development the foster to economy. I have established an internal Fintech Committee in May in May Committee Fintech an internal established I have for on technologies leverage best to how explore to 2019 services.financial the banking Bank is positioning The of emerging the use industry hub for regional as a leading on work initiated has Committee The technologies. such as Artificial tools Fintech regulate to approaches Ledger Technologies Distributed Big Data, Intelligence, and biometrics.

Statement From The Governor 10

About Bank of Mauritius

About 1 Bank of Mauritius Fanam

The Fanam (‘panam’ in Tamil) was a small coin issued by the Madras Presidency until 1815. It circulated alongside the Indian rupee. The Fanam was phased out after 1815 to make way for the rupee coin which was worth 12 Fanams. About Bank of Mauritius 13 financial system in Mauritius by ensuring that depositors ensuring that depositors by in Mauritius system financial in the event deposits, their insured access to prompt have institution. taking non-bank deposit a bank or by of failure been proclaimed. yet not has, however, The Act is also the AML/CFT SupervisorThe Bank of Mauritius for and ensures in the banking sector institutions operating which laws banking the with institutionscomply these that of Financing the Suppression for include the Convention and Anti- 2003, the Financial Intelligence Act of Terrorism of Terrorism 2002, the Prevention Laundering Act Money (International of Terrorism 2002, the Prevention Act Nations (Financial United 2008 and the Obligations) Act Sanctions Ban) and Travel Embargo Arms Prohibitions, made thereunder. as regulations as well 2019 Act Laundering Act and Anti-Money The Financial Intelligence and and the Financial Intelligence 2002 (“the FIAMLA”) inter prescribe, 2018 Laundering Regulations Anti-Money monitoring due diligence and transaction alia, the customer financial institutions so by be implemented to standards financing laundering and terrorism combat money as to 2002 and the Act of Terrorism while the Prevention to measures for provide thereunder made regulations the for The Convention general. in combat terrorism 2003 provides Act of Terrorism of Financing Suppression of the the Suppression for Convention the International for in Mauritius. of law force have to Financing of Terrorism (International of Terrorism In addition, the Prevention to adhere 2008 enables Mauritius to Obligations) Act conventions. counter-terrorism international various With a view to promoting the stability and soundness promoting to With a view the Mauritius Deposit of the domestic financial system, the establishment for provides 2019 Act Scheme Insurance (a) protect Scheme to of a Mauritius Deposit Insurance deposit taking of a bank or non-bank depositors insured against of the loss insurance providing institution by the stability to of the (b) contribute deposits; and insured Pursuant to the National Payment Systems Act 2018, 2018, Act Systems the National Payment to Pursuant oversee regulate, to with the power vested the Bank was and other and supervise systems the national payment the purpose in Mauritius primarily for systems payment effective efficient and secure, of ensuring their safe, and accessibility public. the operation to Objects and Functions Objects and bank central is the nation’s of Mauritius Bank The 2004. Act Mauritius of the Bank from mandate its derives with corporate body a as Bank the establishes Act The activities and operations succession, with its perpetual supportin undertaken aims Bank The mandate. this of of in a framework perform its functions efficiently, to and accountability the application and transparency to It is committed with bestof policies in line practices. about its policies, activities informed Mauritians keeping a legislative by The Bank is governed and operations. that defines its primary price Act as maintaining objective balanced economic and orderly stability and promoting assigns additional functions The same Act development. support to the Bank contributes the the Bank. Overall, to of its citizens. and qualitycountry’s of life development Functions Ensure adoption by financial by adoption Ensure procedures and policies institutionsof manage risks and control designed to effectively. of the rights and interests Safeguard of financial and creditors depositors institutions. that might factors system-wide Monitor a negative have or potentially have on the financial condition of impact financial institutions. take and Carryinvestigations out illegal, suppress to measures and improper dishonourable and any abuse market practices, of the banking laws. breach potential Promote public understanding of the public understanding Promote awareness including financial system, associated of the benefits and risks financial products with different the Bank, which are by regulated financial institutions. by offered • • • • • Promote economic activities Promote domestic and to due regard having economic developments. international soundness the Ascertainpromote and of financial institutions and their rules laws, with governing compliance and regulations. Conduct monetary policy and manage taking of the rupee, rate the exchange and balanced account the orderly into of Mauritius. economic development and superviseRegulate financial under its purview. institutions falling other with collaboration in Manage, supervisory relevant and regulatory and bodies, the clearing, payment of Mauritius. systems settlement on a disseminate, Collect, compile, timely basis, monetary and related financial statistics. exchange Manage the foreign of Mauritius. reserves • • • • • • • Objects and Functions of the Bank and Functions Objects Primary Object: Other Objects: economic development. To ensure the stability and ensure To soundness of the financial system. bank for act as the central To Mauritius. To regulate credit and credit regulate To in the best interests currency development economic the of of Mauritius. Objects To maintain price stability and To promote orderly and balanced orderly promote • • •

About Bank of Mauritius 14 About Bank of Mauritius 15 Hemlata Sadhna SEWRAJ-GOPAL Secretary the Board: to Composition of the Board of Composition the Board of Directors as at 30 June 2019 Directors 12/14 12/14 13/14 13/14 9/14 14/14 14/14 12/14 Number of meetings attended during attended of meetings Number FY2018-19.

Axel Pellegrin Axel Seeyave Antoine Ranapartab Tacouri Saïd Toorbuth Dr Renganaden Padayachy DeputyFirst Governor Vikramdass Punchoo Mahendra Second Deputy Governor Gopaul Sanjay Yandraduth Googoolye Yandraduth and Chairperson Governor Antoine Antoine SEEYAVE PUNCHOO Mahendra Vikramdass Mahendra Axel Axel Saïd PELLEGRIN TOORBUTH PADAYACHY Dr Renganaden Sanjay Sanjay GOPAUL TACOURI Ranapartab Yandraduth Yandraduth GOOGOOLYE The Board of Directors comprises the Governor, who acts as the as the who acts the Governor, comprises Directors of Board The by appointed Directors and five Deputy the two Chairperson, Governors, and decisions a quorum constitute Six members the Finance Minister. the equality of an of votes, In the event majority. simple by taken are formulate to is responsible The Board has a casting vote. Chairperson than the and business of the Bank, other policy of the affairs the general The Bank of Mauritius of monetary policy. and determination formulation months. every two at least one meeting for provision makes 2004 Act occasions during FY2018-19. on 14 met of Directors The Board Governance of Directors Board The Audit and Risk Committee of the Bank provides oversight over the adequacy of the Bank’s internal controls and controls internal of the Bank’s the adequacy over oversight of the Bank provides Committee and Risk The Audit of at its meeting of Directors the Board by reconstituted was The Committee with legal requirements. compliance Mr Ranapartab by is chaired The Committee Directors. Board non-executive three comprises and presently 2018 March on six occasions during met The Committee and Mr Saïd Toorbuth. Pellegrin Mr Axel are and the members Tacouri acts Secretary while the Bank’s meetings, Committee and Risk the Audit attends Audit The Head-Internal FY2018-19. the Committee. to as the secretary Audit and Risk Committee *Rs360,000 *Rs360,000 *Rs360,000 *Rs360,000 *Rs360,000 *Rs600,000 *Rs360,000 *Rs360,000 as at 30 June 2019 as at 30 Composition of the MPC 4/4 4/4 4/4 4/4 4/4 4/4 4/4 4/4 Number of MPC meetings attended attended of MPC meetings Number during FY2018-19.

Professor Sanjeev Kumar Sobhee Kumar Sanjeev Professor the Prime Minister by Appointed Mohammad Mushtaq Namdarkhan the Finance Minister by Appointed Narrainen Dr Streevarsen Minister the Finance by Appointed Marie Rosy Priscilla Pattoo Minister the Finance by Appointed Dr Renganaden Padayachy DeputyFirst Governor Vikramdass Punchoo Mahendra Second Deputy Governor Internal Members Internal Googoolye Yandraduth and Chairperson Governor Members External Lam Lim Chan Kwong Thuon Mine the Prime Minister by Appointed * Remuneration of MPC members. * Remuneration a monthly receives The Governor Note: to his contribution of Rs50,000 for fee and the the MPC. The Deputy Governors of paid a monthly fee are members external Rs30,000. After every MPC meeting, the Governor, as Chairperson of the MPC, holds as Chairperson After the Governor, every MPC meeting, on the decision of details provide to on the same day conference a press Rate Repo its decision on the Key public the MPC. The MPC also makes of prevalent the evaluation summarises that Release a Media of way by GDP real and inflation for forecasts and conditions financial and economic same the at website Bank’s the on published is Release Media The growth. released are The MPC minutes conference. the holding of the press time to after and also weeks meeting the MPC two exactly website on the Bank’s MPC members. of pattern the voting contain Members of the MPC, in their decision-making process, evaluate the evaluate of the MPC, in their decision-making process, Members reviewing and inflation outlook after GDP growth the real to balance of risks and economic and financial data of domestic and international a whole set and projections including economic data, The MPC reviews information. with consistent Rate Repo of the Key level decides on the appropriate mandate. the Bank’s achieving The MPC regularly meets on four occasions during a year, but does not rule rule but does not year, occasions during a on four meets The MPC regularly developments by warranted if meetings out the possibility interim having of to have members MPC and domestic fronts. international the both on observe that they the a Code of Conduct which safeguards to adhere the conduct. The MPC determines of ethical highest standards possible monetary domesticwith economic line in is that stance policy appropriate of price stability the objectives attain and sustainable to conditions in order economic growth. The Bank is mandated, as per Section 5(1)(a) of the Bank of Mauritius of Bank the of 5(1)(a) Section per as mandated, is Bank The rate conduct monetary the exchange policy and manage ‘to 2004, Act and balanced economic account the orderly into taking of the rupee, makes Act Section 54 of the respect, of Mauritius’. In this development is to (MPC), whose purpose a Monetary Committee for Policy provision the Bank, by monetary be conducted to policy and determine formulate price stabilitywith the aim of maintaining time, taking while at the same of the economic development and balanced the orderly consideration into The MPC signals its monetary with country. policy stance that is consistent Rate, Repo changes in the Key domestic economic conditions through rate. policy which is the Bank’s Standing from left to right: Professor Sanjeev Kumar Sobhee, Dr Renganaden Sobhee, Dr Renganaden Kumar Sanjeev left right: Professor Standing from to Priscilla Pattoo, Ms Marie Rosy Namdarkhan, Mr Mohammad Mushtaq Padayachy, Lam Thuon Mine, Mr Mahendra Mr Lim Chan Kwong Googoolye, Mr Yandraduth Narrainen Punchoo, Dr Streevarsen Vikramdass Monetary Committee Policy

About Bank of Mauritius 16 About Bank of Mauritius 17 4 % 2017-18: 4 2017-18: % Expiryof Contract Staff Turnover 6.9 2017-18: 5.5 2017-18: 11 Leavers 2017-18: 5 2017-18: Resignation 6 2017-18: 5 2017-18: Retirement 315 Number of 2017-18: 295 2017-18: Employees % % 4 Contract 51 % Our Staff 49 % Employment Type Employment 96 Mr Mardayah Kona Yerukunondu, Head of Legal Services at the Bank, was appointed Ombudsperson for Financial for ServicesLegal Ombudsperson of Head appointed was Bank, the at Yerukunondu, Kona Mardayah Mr The services the that date. from Bank with effect of the from resigned accordingly and 2019 March Services01 on of financial services consumers against from and deals with complaints Financial Services for Ombudsperson receives as he such directives and give appropriate, where compensation, for award an make financial institutions and may up of the Office of setting to assist in the of its officers financial institutions. The Bank seconded two to determine may Financial Services. for Ombudsperson Appointment of the Ombudsperson for Financial ServicesAppointment of the Ombudsperson for In March 2019, the Bank reviewed its organisational structure and redefined its leadership model. It set up specialised up set model. It its leadership redefined and structure its organisational the Bank reviewed 2019, In March and functions. A its objects meet effectively to of its employees and talents the strengths into divisions while tapping on work to category of a new of employees onboarding the was has been operating the Bank way major change in the payment national first (NPS), the Switch of the National Payment implementation the by shift motivated system, a 24/7 were of which 14 2019, people as at 30 June count of 315 the clock. The Bank had a head round operate to platform due to left people employment Bank’s the 21 FY2018-19, During 6.9 per cent. around was rate Its turnover contract. on hired. people were 41 and expiry of contract. resignation, retirement, Human Resources Human on its deliver to workforce and motivated an able and maintaining developing acquiring, to is committed The Bank dynamic and the to respond to talents new of attracting its objective pursued the Bank FY2018-19, During mandate. major projects, on two embarked The Bank has succession planning. for while providing environment, challenging work Management System. Performance and the Management System Human Resources of its current the review namely, Permanent Interns 23 2017-18: 19 2017-18: Number of Safety and Health Committee Safety and Health Committee Meeting and Health Committee The Safety months. every two meets SafetyFire to safety in Fire Staff trained are with familiar are that they ensure procedures. evacuation Visit at RodriguesSite Office and Health Officer The Safety Office and the Rodrigues visited in exercise drill a fire conducted February 2019. Local 68 2017-18: 48 2017-18: Health Safety & 2017-18: 78 2017-18: Overseas 104 First Aid Inspections Accident StatisticsAccident legislation are up-to-date. legislation are maintained and controlled. and controlled. maintained reported during FY2018-19. reported First aid kits are verified and verified aid kits are First out at all levels of the Bank’s Bank’s of the out at all levels sustained by staff have been staffsustained by have replenished to ensure that all ensure to replenished Accident at work remains well well remains at work Accident Inspections are regularly carried carried regularly are Inspections under control. Four minor injuries minor injuries Four under control. building to ensure that safety and that safety ensure building to items as prescribed by the relevant the relevant by as prescribed items The Bank hosts an internship programme that is designed to expose university students to its work environment, environment, its work university students to expose that is designed to programme The Bank hosts an internship assess their future to In doing so, the Bank assists the interns of its operations. view them with a broad providing thereby Divisions in line with their fields in various and posted on-boarded were 23 interns FY2018-19, decisions. During career experience. Bank as an engaging and rewarding at the and their stay gathered the experience view The interns of study. Internship Programme Internship The Bank values the continuous development of its staff. Consequently, the strengthening of its internal capability of its internal and strengthening the of its staff. Consequently, development the continuous values The Bank courses and local overseas attended 44 cent of the workforce per its agenda. Accordingly, high on expertise rank Bank’s The qualifications. and technical Bank also supports The staff professional in acquiring during FY2018-19. needs information the for cater servicesand to order sources in quality information providing at aims Centre Knowledge of the staff. Training and Development Training health arrangements are effectively effectively are health arrangements The Bank fosters a culture that focuses on work safety and well-being of staff members, through preventive and preventive staffof well-being and safety through members, work on focuses that culture a Bank fosters The practices. proactive Workplace

About Bank of Mauritius 18 About Bank of Mauritius 19 Ensure that sufficient that sufficient Ensure and amount of banknotes to being provided coins are local demand. meet Maintain of banks, accounts and other Government institutions. of cheques Daily clearance the Cheque Truncation through System. Main Banking and Currency activities: Currency Main Banking and Governor Googoolye paid a courtesy call to the Chief paid a courtesy call to Googoolye Governor GCSK. Clair, Mr Louis Serge Commissioner of Rodrigues, Rodrigues’ Office banking central provides 1999. The Office in March which Rodrigues, started has an office in The Bank operations Bills Mauritius Treasury of services Government sales of is serviced and staff. eight by also conducts over-the-counter It corporations. and non-financial individuals to Notes and Treasury Effective April 2019, the Financial Stability Unit of the Bank April 2019, Effective the Supervision from Departmenthas been detached and StabilityFinancial and created newly a within integrated Department. This change in focus Control & Product Risk the of awareness growing became necessary was as there holistic a more take need and importance the Bank to for identifying, measuring, managing and towards approach whilst ensuring that in the financial system, mitigating risks for being adopted are management techniques risk proper that the Bank will ensure This merger operations. its internal handle risk. designed to synergies operational derives the objective is to create a structure within the Bank that the Bank that within structure a create is to the objective and mitigation assessment the identification, will facilitate ERM An Bank. the of functions the to inherent risks of and sound governance for is a prerequisite framework long- Bank’s the achieving of likelihood greater a provides goals. term and will develop ERM framework the functional level, a At and policies, management tools, risk different implement Statement Policy (including the Investment procedures also aims of the Bank). It Statement Tolerance and Risk management concepts on risk awareness at increasing and advise to as report well in the Bank, as at all levels issues that are on risk-related Senior Management basis, this a day-to-day decision-making. On for relevant core the to intrinsic risks and analysing reviewing entails risk and enhancing key developing functions, operational identifying key self-assessment models and and control indicators. risk changed fundamentally have innovations Technological institutions. and models in financial business processes the benefits that these advancements Notwithstanding also carry they of efficiency and cost saving, bring in terms and more as institutions become more significant risks, Banks IT systems. complex on and reliant interconnected of cyber-attacks. the risk to exposed also increasingly are all financial Thus, cybersecurity for a risk has become IT systems of an institution’s institutions. The failure legal, customer financial, significant adverse can have be not should that consequences reputational and integrated The Bank has consequently underestimated. cyber-security management framework. within its risk with the Risk The IT Security thus, merged Unit was, for holisticapproach a for way the Department pave to at the Bank. The Unit management has been tasked risk that is adapted mitigation strategy a risk with elaborating and challenges. risks global IT and technology-related to being subsequently IT securityThe Bank’s policies are to enhanced and staff is ongoing in order training while meeting cyber threats, to and respond repel monitor duties that well-established are requirements compliance be performed effectively. need to Enterprise Risk Management Enterprise structure governance The Bank is enhancing its bank-wide Management Risk Enterprise an of up setting the with the understand better to in order (ERM) framework that risks financial and operational strategic, potential Essentially, to. be exposed may organisation the entire The Bank has completed several key projects during the projects key several completed The Bank has area up of a work including the setting under review, year renewal and site Recovery at its Disaster centre recovery of IT equipment. The 2019-20 Budget Speech called upon the Bank to seek Speech called upon the Bank to Budget The 2019-20 of the Financial Services cooperation and the collaboration the establishment for agency other Commission and any In Registry. (CKYC) Customer Your Know of the Central the launched for was of Interest an Expression this respect, shortlistingand potential of 2019 March in project CKYC The Bank has been completed. the system for vendors of the system requirements finalising on the is currently the to respond to will be required and shortlisted vendors Proposal. for Request Bank’s With the implementation of the NPS, the IT Division has Division IT the NPS, the of Withimplementation the host NPS network the to in order network up a new set the systems, hosts two The infrastructure infrastructure. that System and the Instant Payment Based Switch Card The traffic. of network independent in terms completely are with center a data in hosted are the Switch for equipment to as redundancy security as well facilities all the required The Business Continuity the critical systems. for ensure basis. on a 24/7 NPS operates Information Technology and Facilities Technology Information Project Transformation on an IT has embarked The Bank Phase I of a phased manner. in be implemented which will of Accounting implementation on the focuses the project Currency System, Banking Core Ledger, General Solution Treasury Integrated Management, Inventory enhance the to is expected This project and Middleware. and services The alike. infrastructure technology Bank’s smart build a is to Project of the IT Transformation objective streamlining to with a view service IT platform oriented promoting duplication of entries and reducing processes, Interested Processing. Through as possible, Straight as far Interest of their Expression submit to invited were vendors main core four concerning in supplying IT solutions The shortlisting of activities of the Bank in February 2019. and the Request has been completed vendors potential shortlisted to issued been has the project for Proposal for partform Office will also of the IT Rodrigues vendors. to envisaged and it is Phase I Project Transformation the Bank. to link establish a direct

About Bank of Mauritius 20 About Bank of Mauritius 21 October 2018 - to address the FATF requirements requirements FATF the address to - 2018 October Money Laundering and Terrorist Financing Laundering and Terrorist Money Risk Assessment of Mauritius is AML/CFT measures of implementing The purpose abuse. A country’s from the financial system protect to sound and enforcing efforts implementing in developing, the on achieving should focus and regulations laws framework. AML/CFT effective an of objective high-level calls Recommendations FATF the of 1 Recommendation their understand assess and identify, upon countries to take and risks financing laundering and terrorist money action, including designating an authority or mechanism to apply resources and to risks assess actions to coordinate mitigated. are aimed at ensuring that the risks launched in Assessment (NRA) was A National Risk and assess understand identify, to in order January 2017 by faced risks financing terrorist laundering and money the implementation to the way Mauritius. The NRA paves laundering combating money to approach of a risk-based relevant thus making financing activities, and terrorism The NRA in their tasks. effective more stakeholders out using the National carried Mauritius was for exercise Financing Risk and Terrorism Laundering Money World the by and provided developed Assessment Tool devise to the assessment was of Bank. The main objective the through AML/CFT regime risk-based an effective money or mitigate which will prevent of measures adoption identified of basis the on financing terrorist and laundering 1 of the FATF, with Recommendation In compliance risks. Laundering and Money National first Mauritius issued its Mauritius brought a series of amendments to its AML/ to a series of amendments brought Mauritius namely of Regulations, set and a new CFT framework Laundering Money Anti and Intelligence Financial the as from - effective promulgated was 2018, Regulations 01 Due Diligence; Politically-Exposed Customer regarding Transfer Value or Money Banking; Correspondent Persons; on Reliance Transfers; Wire Services; Technologies; New and Branches and Foreign Control; Parties; Internal Third Subsidiaries, amongst others. successful in obtaining Mauritius was In April 2019, Recommendations on 11 re-rating compliance technical held in Meeting of Ministers Council and at the ESAAMLG compliance technical Mauritius obtained 2019, September In the light of these two Recommendations. on 19 re-rating on Compliant rated is now Mauritius exercises, re-rating on 9 Compliant and Largely Recommendations 26 FATF has commended The ESAAMLG Recommendations. FATF the following made the significant progress Mauritius for 2018. publication of its MER in September , which is an 2 (the ‘FATF Forty Recommendations’) (the ‘FATF 1 The Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG), which comprises 18 countries in the eastern and southern African region, is a Regional Body subscribing to Body subscribing to is a Regional African region, and southern countries in the eastern 18 which comprises (ESAAMLG), Laundering Group Africa Anti-Money and Southern The Eastern and proliferation. terrorism laundering and financing of combat money to global standards The Financial Action Task Force (FATF) is an inter-governmental body established in 1989 by the Ministers of its Member jurisdictions. The objectives of the FATF are to set standards standards set to are of the FATF of its Member jurisdictions. The objectives the Ministers by in 1989 body established is an inter-governmental (FATF) Force Task The Financial Action of the to the integrity threats related other financing and laundering, terrorist combating money for measures and operational regulatory of legal, effective implementation and promote financial system. international associate member of the FATF, Mauritius participates in member of the FATF, associate made progress evaluate to a self-assessment process Forty On Recommendations. the FATF in implementing published the Mutual the ESAAMLG 2018, September 21 Report (MER) on its assessment of Mauritius Evaluation Forty Recommendations the FATF with of compliance level its AML/CFT system. of of effectiveness and the level 2  1  Mauritius commits unflinchingly, through numerous numerous through Mauritius commits unflinchingly, and and terrorist laundering money combat to initiatives, and ratified financing. It has accordingly proliferation and treaties, conventions international various acceded to Nations Convention the United to including its adherence Psychotropic and Drugs in Narcotic against Illicit Traffic Convention Nations the United and Substances Crime. Mauritius also Organised against Transnational on Combating Standards the International to adheres and and the Financing of Terrorism Laundering Money the Financial by issued, in February 2012, Proliferation Force Task Action International Standards on Anti Money Standards on Anti Money International of Laundering/Combating the Financing Terrorism The Financial StabilityThe Financial begun already Division has well-defined a front-loading by process this change and monitoring areas risk identifying for nomenclature risk macro-systemic is conducting a The Bank risks. of providing objective with the survey its regulatees among prospects. macro-financial on intelligence market-based identification a risk collected, Based on the information of concern areas depicting the key matrix will be produced, of vulnerability occurrences. and the likelihood/severity the producing for material provide This matrix will main which will be the Bank’s heatmap, macro-systemic towards focus The sources. of risk on appraisal fingerprint importance attaching forward-looking to requires also risk Stabilitymodels. The Financial proposed Division has which will help indicators, warning of early a framework In addition, triggers. risk identify the key the Bank better been supplemented have financial soundness indicators such measures, and dispersion with concentration a distributional perspective. from is examined that risk been developed, financial stability have metrics Various enables that toolkit testing stress modern a with together risks of sources various of assessment comprehensive market, concentration, credit liquidity, including credit, exchange. and foreign rate interest As a founder member of the Eastern and Southern Africa and Southern Eastern member of the As a founder (ESAAMLG) Group Laundering Anti-Money and to its Mutual Evaluation procedure. procedure. its Mutual Evaluation and to Enhancing transparency of legal persons and legal persons of transparency Enhancing arrangements; collection AML/CFT data an effective Implementing and authorities; competent in all relevant system cooperation. and international regional Enhancing • • • Communications and Outreach and Outreach Communications and help consumers educate to In line with its mandate policy decisions, the significance of them understand The initiatives. literacy its financial the Bank pursued for the programme literacy a financial Bank, thus, devised the discussions with It initiated stakeholder. media, a key with the Media Trust. Association and Mauritius Bankers complimentary of the elaboration led to The collaboration All local business journalists. for sessions media training in the the training attend to invited media houses were 2019, June on 03 Auditorium Beejadhur Aunauth Bank’s The audience been organised. to have of its kind the first print media as from 20 business journalists comprised online media. The media and radio television, as from well audience grasp at helping the target session aimed training a clearer have such that they mandate core the Bank’s management, reserve of monetaryunderstanding policy, of the banking industry the evolution supervision, AML/CFT, damage. The training reputational and the significance of by the Chief and the Bank officials from key imparted by was Association. Officer of the Mauritius Bankers Executive Strengthening the AML/CFT Legal and Regulatory the AML/CFT Strengthening Framework; supervision risk-based a comprehensive Implementing framework; which the money by the process Strengthening detected are threats financing terrorist and laundering and illegal prosecuted criminals are and disrupted, confiscated; are proceeds and cooperation; Enhancing national co-ordination Consolidating capacity and awareness building, training programs; raising • • • • • A National Strategy for Combating Money Laundering and Laundering Combating Money for Strategy A National - 2022 2019 and Proliferation: of Terrorism the Financing out also been rolled has Strategy) (the National AML/CFT tackle to that Mauritius will adopt chartto the approach financing and proliferation laundering, terrorist money In addition, years. three the next over financing threats financial crime, in addressing the objectives it describes obligations international meeting in assists and Mauritius on findings of the is based The Strategy the FATF. by set NRA Report in the MER of Mauritius. and gaps identified eight core comprises Strategy The National AML/CFT the abilitythemes that enhance prevent Mauritius to of terrorism and the financing of laundering money and deter namely: and proliferation, Counter Terrorism Financing Risk Assessment Report Assessment Risk Financing Terrorism Counter (NRA Report) 2019. 29 August on

About Bank of Mauritius 22 About Bank of Mauritius 23 Bank of Mauritius institutions Other financial

Member since March 2019 2019 Member since March USD Advertising Value Equivalent Advertising Value 0 80,000 Source: Meltwater. Source: is used (AVE) Equivalent Advertising Value the industry ‘measure’ in the public relations to of a communication media coverage benefit from the commonly measure would AVE campaign. gained, its placement and of the coverage size if of space, amount what the equivalent calculate cost during the as advertising, have would paid for period under review. the Museum to learn about the evolution of currency in of currency about the evolution learn the Museum to country’sthe with links rich intricate its and Mauritius Council of As a member of the International history. celebration Museums, it also participated in worldwide The Museum team Day. Museum of the International in the development that museums play the role emphasised on policies table during the round Similarly, of society. the of Memoryby and management of Sites organised Ministry Bank’s the UNESCO, and Artsof Culture and the Sites role in promoting its reaffirmed Museum proudly of artefacts. of Memory preservation through Media exposure helps in defining and authenticating authenticating and defining in helps exposure Media can better strategies so that communication audiences audiences. the Bank’s to information serveconvey and further to media a gateway as is valued The exposure on public the inform and educate to especially influence, the Bank. of initiatives policy decisions and institutions Other financial century) us and takes th Share of Voice Share Bank of Mauritius Source: Meltwater. Source: is the percentage of the market of the market is the percentage of Voice Share time period holds in a given an organisation or players comparable that of other to compared competitors. The Museum welcomed an increasing number of increasing an The Museum welcomed 8,000 persons, Over of FY2018-19. in the course visitors of non-governmental amongst whom students, members associations, visited and senior citizens’ organisations across the meanders of the centuries to present-day present-day of the centuries to the meanders across the opportunity have look at coins Mauritius. Visitors to use for the then-colonial governments by abroad minted in Mauritius. The Bank’s Museum boasts an impressive array of some array Museum boasts an impressive The Bank’s the joining of from This collection stems 500 artefacts. Ltd hands of the Bank of Mauritius with the MCB Group Mint and the and the HSBC (Mauritius) Ltd. The Royal also Rue have Thomas De La firm producing banknote up of the Museum. The journey the setting to contributed starts (12 period with the Arab Museum The Bank has been very active in relationship-building and has been veryThe Bank in relationship-building active transparency promoting to with a view media engagement on in delivering confidence and awareness raising and and seamless consistent has entailed This its mandate. multimedia awareness the media, with interaction to initiatives literacy financial regular and campaigns communication with the Bank’s clear and coherent ensure the public to stakeholders from audiences, ranging target at large. 7,000 persons trained on trained persons counterfeit detection counterfeit May 2019 May Participation of the Museum in the worldwide event - Participation event of the Museum in the worldwide 2019. in May 2019 Museum Day International 18 visitors 8,000 The Museum has been very active as custodian and verybeen custodian has as Museum The active 2019, 26 April to 22 From national heritage. of preserver Monuments and for Day it participated in the International with the Ministry in collaboration of ArtsSites and Culture, and the Ministry Fund the National Heritage of Tourism. Monuments for Day the International of The celebration a golden opportunity constituted to and Sites explain to in Mauritius but of currency only the evolution not visitors also its socio-economic significance.

About Bank of Mauritius 24 About Bank of Mauritius 25 Schools 50 Students 3,000 In line with the Bank’s role to promote financial literacy and financial literacy promote to role the Bank’s In line with students Museum have visiting the protection, consumer of the central the role on a presentation to been invited security on banknote briefed also were bank. Visitors on the fight awareness create to in an attempt features counterfeiting. against banknote Currency Currency Contribution to an articleContribution to on ‘Importance of in Mauritius’ in System Indentureship the during 2018. November Newsletter Fund Ghat Trust Aapravasi anniversary of the August 2018 th 20 November November 2018 Governor Googoolye Googoolye Governor at a speech delivered of the the Celebration 125 Governor Googoolye Googoolye Governor students addressed Mauritius at the ICSA ceremony. Graduation Mauritius Civil Service Mutual Aid Association Ltd. The Monetary Committee Policy to unanimously voted Repo the Key keep at 3.50 per cent Rate per annum. 15 • • The Monetary Policy unanimously Committee the Key keep to voted at unchanged Rate Repo 3.50 per cent per annum. November November 2018 November November 2018 July 2018 09 Governor Googoolye Googoolye Governor on a speech delivered the occasion of the signing of the Letter the between of Intent Bank of Mauritius, the Mauritius Bankers Association and IHS Markit. 14 25 The Bank won the The Bank won Global Banking 2018 as and Finance Award Best Bank Corporate Governance. The Bank published its Annual Report the for ended 30 June year 2018. The Bank published a Guideline applicable to all banks licensed under 2004, the Banking Act the write-off of non- for performing assets. December 2018 December 2018 03 14 July 2018 Second Deputy Punchoo Governor a speech delivered of on the Impact in Basel III Reforms of the Implementation Basel II/III in Emerging and Developing Market Economies. 24 Governor Googoolye Googoolye Governor a speech delivered at the Annual Dinner with Major Economic Stakeholders. Capital Finance Capital Magazine International the award conferred Bank Best Central for in the Indian Governance the Bank. Ocean to Googoolye Governor a speech delivered at the Launch of Africa the Barclays Index Financial Markets in Mauritius.

October October 2018 November November 2018 November November 2018 23 17 22 The Bank won the The Bank won MEA Business Award as ‘Leading Financial Institution the Year of – Africa’. 2018 The Bank issued to letters instruction implement banks to of the recommendations Report Future Banking Your customers’ improve to banking experience. Governor Googoolye Googoolye Governor on a speech delivered the occasion of the Listing of the Golden Jubilee Bond on the of Exchange Stock Mauritius.

October October 2018 22 July 2018 December 2018

September September 2018 07

18 20 Governor Googoolye Googoolye Governor at a a speech delivered organised conference the Financial by Services Commission on for Enabling Framework Financial Technologies in Mauritius. Governor Googoolye Googoolye Governor at the a speech delivered Opening of the Orientation Newly for Programme Bank Central Recruited IMF, by organised Officers South and Bank of Afritac Mauritius. Dateline of Key Events Events of Key Dateline during FY2018-19

About Bank of Mauritius 26 About Bank of Mauritius 27 February 2019 May 2019 May 2019 May 06 22 The Monetary Committee Policy to unanimously voted Repo the Key leave unchanged at Rate 3.50 per cent per annum. The Monetary Committee Policy unanimously decided Repo the Key leave to unchanged at Rate 3.50 per cent per annum. 17 Governor Googoolye Googoolye Governor a speech delivered at the Continental Seminar of the AACB jointly 2019, the year for the Bank. by organised The Bank published the Quarterly issue of its first Economic Report for 2019. March Meeting of the FSB Meeting th May 2019 May 02 April 2019 11 Regional Consultative Consultative Regional Sub-Saharan for Group Africa. Governor Googoolye Googoolye Governor the at a speech delivered 15 The Bank won the The Bank won Bank for Best Central Governance Corporate – Indian Ocean from Award 2019 Business International Magazine. Governor Y Googoolye Y Googoolye Governor led discussions with the delegation of the Central the headed by Bank of Kenya, Njoroge, Dr Patrick Governor session at a brainstorming enhancing to with a view the two between cooperation banks. central The Bank signed The Bank of a Memorandum with Understanding and the China Banking Regulatory Insurance on cooperation Commission sharing and information of banking in the area supervision. The Bank signed of a Memorandum with the Cooperation for Force Mauritius Police combating financial crimes and/or illicit activities the Mauritius to relating financial services sector. January 2019 January 2019 23 May 2019 May 25 April 2019 May 2019 May 03 10 25 Governor Googoolye Googoolye Governor remarks delivered at The Financial Connectivity Thematic African on How Forum an countries can play in the Belt role active Initiative. and Road

January 2019

March March 2019 28 18 May 2019 May 27 The Bank withdrew The Bank withdrew the Rs2000 paper from banknote circulation. The Bank won the The Bank won African MEA Markets Business Excellence as Best Award Financial Services Institution 2019. Governor Googoolye Googoolye Governor on a speech delivered the occasion of the change of name and of the logo the unveiling of the successor entity des the “Banque to Ltée”. Mascareignes Governor Googoolye Googoolye Governor a speech delivered Banquet the to prelude the of in the context ADC Global Blockchain Summit. The Bank issued a the write- Guideline for off of non-performing assets.

March March 2019 27 December December 2018 May 2019 May

June 2019 20 The Bank issued a draft Guideline on the market issue of money instruments. Governor Googoolye Googoolye Governor a speech delivered at the Correspondent Banking Academy Standard by hosted Bank. Chartered

13 28 The Bank issued its first The Bank issued its first edition of the Financial Stability Report 2019 for the which covered up to period June 2018 December 2018. Governor Googoolye Googoolye Governor on a speech delivered Regulation Cross-Border Digital to in Relation at the ADC Global Assets Summit. Blockchain

Banking Standard Standard Academy Academy hosted by by hosted …The Bank expects financial …The Bank expects strong, maintain institutions to and appropriate effective management and risk governance to so as not infrastructure conduct of the safe compromise their business. Correspondent Correspondent Chartered Bank Chartered Conference on Conference for Enabling Framework Financial Technologies in Mauritius …fintech must be properly must be properly …fintech the maintain to regulated stability and soundness of the financial system. Anniversary of th Mauritius Civil Service Mutual Aid Association Ltd 125 Correspondent Correspondent banking… is the of international lifeblood and financial payments and provides flows, supportvital to and economic growth development. ICSA ICSA Mauritius Ceremony Graduation Graduation …a well-developed and efficient …a well-developed is a domestic bond market and healthy for prerequisite financial markets. buoyant …Good governance …Good governance an institution’s from sources and processes internal is no doubt There controls… that accountability and major are transparency of in the architecture pillars governance. Launching Ceremony Launching Ceremony Africa of the Barclays Financial Markets Index … dynamic and efficient financial of triggers pre-eminent are markets virtue by of their economic growth capability crystallise to the elements optimised look for: that investors offerings, high returns, product and strong good governance and legal frameworks. regulatory Listing Jubilee of Golden Stock Bond on the of Mauritius Exchange Highlights of Governor’s Speeches of Governor’s Highlights varying during occasions on and gatherings audiences specific diverse themes and on addressed The Governor below: summarised are website, Bank’s on the available and addresses, main gist The of the speeches FY2018-19.

About Bank of Mauritius 28 About Bank of Mauritius 29 Protectionist measures measures Protectionist movement on the free impact of goods and services affect obviously and they economic performances the world. across AACB AACB Continental Seminar ADC Global ADC Global Summit Blockchain “Adherence to a common to “Adherence will of standards set standardisation foster of the regulation countries and across cross-border facilitate digital of regulation by Blockchain, assets… mitigating the burden on the financial industry, is a game changer in where an environment financial traditional models are transaction expensive.” quite Financial Connectivity on How Thematic Forum African countries can the in role an active play Initiative Belt and Road It is, therefore, to the advantage of countries across Africa to Africa to of countries across the advantage to It is, therefore, funds funds and private equity investment commercial encourage stemming projects participate of key fully in the construction to Initiative. the Belt and Road from In our region, the availability the availability In our region, on the of information financial services industry be furtherneeds to and financial broadened, furtherenhanced. literacy … central banks have to become more more become to banks have … central Accountabilityaccountable. requires and effective transparency increased deemed it have communication... we with different communicate to appropriate civil broader in the groups stakeholder our financial literacy society through programme.” Meeting of the FSB Meeting th Change of name and of the the unveiling logo of the successor entity the “Banque to Ltée des Mascareignes Regional Consultative Consultative Regional for Group Sub-Saharan Africa 15 …Our banking sector is …Our banking sector experiencing currently an unprecedented transformation technological The Bank Fintech… through institutions financial requires appropriate implement to the protection for measures and information… of data Annual Dinner with Annual Major Economic Stakeholders The Central Bank of Kenya and Bank Bank of Kenya The Central of Mauritius held a brainstorming with a view 2019 May session on 10 between cooperation enhancing to banks. Governor central the two headed the Njoroge Dr Patrick Bank of the Central delegation from Yandraduth while Governor Kenya the discussions for led Googoolye the Bank of Mauritius. The Bank of Mauritius signed a The Bank of 23 on of Understanding Memorandum China Banking with the January 2019 Regulatory Commission and Insurance sharing information and cooperation on of banking supervision.in the area The Governor by signed was Memorandum behalf of the on Googoolye Yandraduth Vice Chairman and by Bank of Mauritius on behalf of the China Zhaoxing Wang Regulatory Banking and Insurance Commission. The Bank of Mauritius and the Mauritius Police Police The Bank of Mauritius and the Mauritius on 25 of Cooperation a Memorandum ratified Force of their out the framework which sets January 2019, in combating in their common pursuit cooperation to the relating financial crimes and/or illicit activities The Mauritius financial services generally. sector Yandraduth Governor by signed was Memorandum Mario Nobin, PMSM, and Mr Karl Googoolye Commissioner of Police. Collaboration of the Bank of Mauritius with Other Institutions of Mauritius of the Bank Collaboration

About Bank of Mauritius 30 About Bank of Mauritius 31 Institution 2019 WINNER of WINNER the African Business Award Best Financial Services WINNER of WINNER the African Business Award Excellence The International Business Magazine conferred the ‘Best Central Bank for Bank for the ‘Best Central Business Magazine conferred The International the Bank. The judging to Award 2019’ Indian Ocean Governance Corporate highest the to adhering on focus unflinching its for Bank the commended panel procedures. policies and its world-class and for ethics, standards, corporate This Award recognises the Bank’s expertise and excellence within the financial within expertise and excellence the Bank’s recognises This Award being work the great ‘… illustrates Googoolye, Governor to According world. governance good on focus unwavering the underlines and Bank the by done of the organisation…’. at all levels The Award was bestowed upon the Bank following a critical assessment based upon the Bank following bestowed was The Award analysis. data academia and extensive leadership, corporate on media analysis, stance a hard that ‘the Bank has taken the fact stressed The judging panel and standards prudential international best adopting policies, governance on its ensure solutions to with innovative paired procedures monitoring exacting liquidity with sufficient capitalised buffers’. adequately are regulatees of the Year 2018 – Africa 2018 of the Year Leading Financial Institution Best Central Bank for Corporate Governance Awards Best Governance Bank for Corporate Central awards by the MEA Markets Magazine. Markets the MEA by awards and the Best Services Financial Institution 2019 WINNER of WINNER WINNER of WINNER the International Business Magazine the International Indian Ocean 2019 Award the Indian Ocean 2018 Award WINNER of WINNER the Year 2018 Award 2018 the Year ‘carefully scrutinised and judged on their performance over the past year, their year, the past and judged on their performance over scrutinised been ‘carefully nominees have The Award deserving named as one of the […] that only the most are ensure to their competition and even innovate willingness to winners’. prestigious Awards the following by Governance Corporate Bank for the BestCentral awarded the Bank was During FY2018-19, and Finance Review Banking and Magazine, Global (CFI.co) Finance International institutions: Capital international Institution the Leading Financial the Year of Africa of also received Business Magazine. The Bank International 2018 in value terms Rs2.9 billion in value terms million in volume 1.4 Rs2000 polymer banknote in Rs2000 polymer banknote as at end-June 2019: circulation • •

SPECIMEN SPECIMEN The new pattern of raised dots is is dots of raised pattern The new blind and visually aimed at helping the the Rs2000 authenticate to impaired polymer banknote; when the is a clear window There is held against light;banknote the Bank of Inside the clear window, in a gold Mauritius building is printed is the banknote as ink that shimmers and around; moved which appear Series of characters under magnification. • • • • The new polymer banknote has has banknote polymer The new such as: securitynew features Rs2000 Banknote goes polymer goes Banknote Rs2000 of Rs2000 banknote polymer a new the Bank issued 2004, of Mauritius Act 35 of the Bank Section to In accordance as from Rs2000 paper banknote family of the 1999 with the withdrawal and began 2018 on 05 December denomination February 2019. 01 as from be legal tender to ceased paper banknote Rs2000 family The 1999 that date. The Bank introduced polymer banknotes in August 2013, with the aim of improving the quality of banknotes in circulation in circulation the quality of banknotes with the aim of improving 2013, in August polymer banknotes The Bank introduced of polymer banknotes the set added to was The Rs2000 denomination banknote durable. as being cleaner and more namely Rs25, Rs50 and Rs500. The polymer Rs2000 banknote denominations, other of three consisted that already incorporates banknote The new July 1999. issued on 01 the original Rs2000 paper banknote of an upgrade represents security using new technology. enhanced security features with, however, the same design as the paper banknote

About Bank of Mauritius 32 About Bank of Mauritius 33 Central banking policy is interactive and requires the contribution of all departmentsall of contribution the bank. central the in requires and interactive is policy banking Central mandate, bank’s overview central of the a broad to have officers recruited newly for it is crucial Accordingly, and wary domestic and both of be up-to-date, to needs one banker, As a central and functions. objectives industry banking the requires industryfinancial the of evolution The in particular, and, developments. international sustainable policy for the right prescribe and to developments and analyse understand to approach a novel economic development. The Bank of Mauritius organised an orientation programme from 22 to 26 October 2018 for its newly recruited recruited its newly for 2018 26 October 22 to from programme an orientation The Bank of Mauritius organised Mozambique, Madagascar, Lesotho, Comoros, 8 countries (Botswana, well as participants as officers from the Bank of between of the collaboration result is the This programme and Zimbabwe). Zambia, Seychelles, Institute. South and Africa Training Afritac Mauritius and the IMF through Regional Conferences/Orientation Programme hosted by the Bank of Mauritius the Bank by hosted Programme Regional Conferences/Orientation Afritac Bank South and by IMF, Bank Officers organised Central Recruited Newly for Orientation Programme of Mauritius The Association of African Central Banks (AACB) Continental Seminar was hosted by the Bank from 06 to 08 May 08 May 06 to the Bank from by hosted Seminar was Continental Banks (AACB) The Association of African Central in Africa’. The Seminar Policy Macroeconomic for Implications Tendencies: Protectionist on the theme ‘Renewed 2019 institutions. As part and international of regional banks and 12 member central 24 from 70 delegates by attended was effective for maintained be should banks central of autonomy the that highlighted was it recommendations, main the Participants at the Seminar protectionism. to related economic vulnerabilities address to monetary policy formulation price maintain should continue to dual mandates, banks, including those having that member central recommended amongst collaboration more the need for highlighted stability They as the primary of monetary objective policy. and trade intra-regional increase to in order Area Trade Free of the African Continental African countries in the context through resilient their economies more shocks. Countries should make of trade thus mitigating the impact investment, capacities. by enhancing their productive and diversification Association of African Central Banks Continental Banks Seminar Association of African Central edition of the Inter Club Youth Club Youth edition of the Inter th Shotput - U16 Boys Boys - U16 Shotput Girls 50M - U12 Boys 50M - U12 Boys - U12 Long Jump Girls - U14 150M Boys - U14 60M Hurdles Boys - U14 60M Hurdles Boys - U14 150M Girls - U16 Hurdles 100M 1,000 athletes from different clubs in Mauritius and in Mauritius clubs different from athletes 1,000 participatedRodrigues in the Championship. following selected Rodrigues, from Fifteen best athletes Stadium, Du Roi held at Camp on Saturday preliminaries in event participated in the two-day 2018 03 November Mauritius. established during the were Nine national records meeting: championship • • • • • • • • • The Bank hosted a meeting of the Financial Stability Board (FSB) Regional Consultative Group (RCG) for Sub-Saharan Sub-Saharan for (RCG) Group Stability of the Financial a meeting Consultative (FSB) Regional The Bank hosted Board in the vulnerabilities and emerging new address to alia, work inter considered, The RCG 2019. Africa on 02-03 May regional and discussed global meeting The resilience. cyber and developments FinTech including system, financial financialstability against potential risks the highlighted Members developments. and financial market macroeconomic with associated tensions, risks trade buffers, external of fiscal and weakening of rising public debt levels, backdrop on possible policy views of political uncertainties, and exchanged and the high level in the cost of credit increases sharp the implement to countries developing challenges for implementation issues and also considered The RCG responses. in the financial sector. computing concluded with a discussion on the use of cloud The meeting Basel III framework. Financial StabilityFinancial Meeting Regional Group Consultative Board Championship. The event was organised in collaboration with the Mauritius Athletics Association and was held on held was and Association Athletics Mauritius the with collaboration in organised was event The Championship. at the Maryse Justin Stadium, Réduit. 2018 November 18 and Sunday 17 Saturday The Bank, together with a number of banks operating in Mauritius, sponsored the 12 in Mauritius, sponsored with a number of banks operating The Bank, together Bank of Mauritius Inter Club Youth Championship 2018 Club Youth Bank of Mauritius Inter

About Bank of Mauritius 34 About Bank of Mauritius 35 The Financial StabilityThe Report the Bank’s communicates to risks of assessments financial stability with a view and mitigating identifying to domestic in the vulnerabilities financial system. The Monthly Statistical Bulletin in statistical data, disseminates with the provision accordance of the Bank of of Section 5(1)(d) 2004. Mauritius Act The Annual Report presents the Annual ReportThe presents the Bank accounts of audited detailed with in accordance year, its financial for of Section 32(3) of the the provision together 2004, Bank of Mauritius Act of the main activities of with a review the Bank. The Quarterly Report Economic presents during the developments macroeconomic enhance public understanding It aims to quarter. the achieve to of the policies implemented of the Bank. mandate Publications publications These statisticaldata. and reports of regular range a wide publishes Bank institution,the accountable an As including the publications Bank issues various The and objectives. activities the Bank’s offerdeeper insight into a Annual Report, Stabilitythe bi-annual Financial Report, Quarterly the Economic Report and the Monthly Statistical website. on the Bank’s available The publications are Bulletin. The Bank organised a World Cup World a organised Bank The the during Challenge Prediction Cup and winners World FIFA 2018 rewarded. were World Cup Challenge 2018 World The Bank implemented a Corporate Wellness Programme to promote the general wellbeing of its staff. Yoga and of its staff. wellbeing Yoga the general promote to Programme Wellness a Corporate The Bank implemented at the Futsal once a week meets Team Football Bank’s The premises. Bank’s on the conducted Zumba classes are and a Cultural of Blood Donation consisted of MUGA, this programme under Pitch Other activities conducted Phoenix. on the diversity awareness promote to Sites and Monuments for Day International the occasion of the on organised trip in Mauritius. heritage of cultural Employee Welfare Employee work healthy social and a professional, and promoting creating by of choice an employer remain to strives The Bank staff particularlyof activities for a number members, the during organised the Bank During FY2018-19, environment. Woman’s The International 2018. Cup Challenge staff Many participated members in the World festivities. end-of-year staff. and the Christmas female The Music Day to distribution at the Bank with the of roses duly celebrated was Day opportunitythe Seasons The talent. singing their offered show staff ChristmasDay of to to members eve the on Carols spirit. team craftsmanship and reinforcing creativity, for ground a breeding was Competition Decoration

About Bank of Mauritius 36 About Bank of Mauritius 37

Seasons Decoration Competition Decoration the Seasons edition of th 2018 Christmas The Employee Welfare Committee of the Bank organised the 4 the Bank organised of Committee Welfare The Employee Christmas 2018 The three best decorations across the different levels housing Departments were rewarded. housing Departments were levels the different across best decorations The three Bank staff were called to showcase their creativity and allow their imagination to set the Christmas in the mood set their imagination to and allow their creativity showcase called to Bank staff were BoM Tower. Christmas around the World. the theme Christmasbased on around The Bank organised a Blood Donation The Bank organised activity with the Blood in collaboration to Association on 03 April 2019 Donors society in towards contribution its bring of Campaign” Life the “Save promoting the Association. Staff of the Bank and participated of the public members in the activity. A cultural trip was organised organised was trip A cultural Bank staff for April 2019 on 27 on the occasion and their family The Day. Heritage of the World promote to of this trip was objective about the diversity awareness of humanity, heritage of cultural their vulnerability and the efforts and their protection for required conservation. Cultural Trip Cultural Blood Donation

About Bank of Mauritius 38

Review of the Economy of the

Review Review 2 Economy Duit

The Duit was a copper Dutch coin worth 2 pfennings. To prevent smuggling, the Dutch East India Company (VOC) ordered special coins with their monogram em- bossed upon them. Only those pieces were valid in Indonesia. The duit was also used in the Americas and Mauritius whilst under Dutch rule. Review of the Economy 41 I) gap. Nonetheless, the current account deficit was deficit account the current I) gap. Nonetheless, - supported by continued inflows from structural sources sources structural from continued inflows supported by tourism investment, direct - foreign exchange of foreign the construction sector to contribute 0.4 percentage point 0.4 percentage contribute to sector the construction point 0.3 percentage from in 2018, GDP growth total to outturn. GDP the 2017 to contribution mainly performance side, GDP On the demand 2018 in performance spending of household on the strong rested to contributors as the key spending and investment performance of strong the this, with Along growth. GDP lent support the year during spending to government exports net performance weak amid continued growth 10.9 per a posted formation capital fixed Gross in 2018. the 4.7 per from an improvement in 2018, cent growth This enabled investment in 2017. it posted cent growth 3.8 per points of the total percentage 1.9 account for to continued Household spending in 2018. cent GDP growth for driver and stable growth of being a steady with its role of 3.2 per cent in 2018. growth maintaining the economy, Imports on growth. a drag demand remained external Net exports of goods in 2018, outgrow of goods continued to 0.7 by per cent while exports rose 1.4 by increasing in imports primarily increase the per cent. Nonetheless, which activities construction in uptrend current the reflected of imported goods additional inputs capital necessitated Infrastructure materials. construction-related and other water generation, pertaining power to improvements ports networks, and airports distribution, road would and influence economic competitiveness positively consistent increase, to expected is Productivity capacity. the and climate investment the of improvement the with domestic infrastructure. better of impact positive for the including Domestic declined significantly, inflation was fact that the economy the reflecting components, core and subdued global inflation, potential below operating domestic prices. The to its pass-through which limited on depreciation rate of exchange diminished impact Headline outcome. weighed on the inflation inflation also core with at 1 per cent in June 2019, inflation stood remaining prices inflation food and administered inflation, global such as falling subdued. Cyclical factors broadly food commodities and domestic fresh food prices for inflationaryin decline steady a pressures. to led products remain under control to is projected Inflation in FY2019-20 factors of exogenous 2 per cent in the absence at below disruptions. and climate-related the reflected account deficit The rise in the current net widening of the goods account deficit. However, higher markedly were on the financial account inflows account balance mirrors The current during FY2018-19. of the economy. behaviour and investment the saving spending infrastructure and investment in rise The widening of the savings-investment in the has resulted (S The services sector continued to be the primary growth be the primaryThe services continued to growth sector side, on the production engine of the Mauritian economy on pace keep to struggled sector manufacturing the while sub- the sugar and textile by account of challenges faced in 4.0 per cent by The services expanded sectors. sector The manufacturing 3.9 per cent in 2017. to compared 2018, growth point to percentage add 0.1 managed to sector The point in 2017. 0.2 percentage to compared in 2018 growing in 2018, buoyant remained sector construction and per cent in 2017 7.5 to 9.5 per cent, compared by since 2008. This enabled of expansion the highest rate The economy remained on a steady growth trajectory trajectory growth on a steady remained The economy domestic and of some sectoral the prevalence despite (GDP) domesticproduct gross Real challenges. external consecutive third the for 3.8 per cent in 2018 by grew broad-based, remained in 2018 The GDP outturn year. and forestry the ‘Agriculture, for except with all sectors GDP growth to growth. fishing’, contributing positively services and the contributions of key by powered was was growth side, demand On the sectors. construction and real consumption real in both a pick-up by backed growth. investment Monetary policy remains accommodative to support to accommodative Monetary policy remains amid subdued inflation conditions. economic growth of supported the transmission The financial market remained stable, The financial system monetary policy. levels adequate intermediation, bank improved by aided holding banks’ capital of high levels relatively of liquidity, policies were Macroprudential risk. and subdued credit supportto the economic cautiously accommodative financial maintaining momentum while prudently growth on focused policy was system Payment stability. system and secure more through supportinggrowth economic reinforced was Fiscal policy transactions. efficient payment and projects of infrastructure the implementation by sustainability ensure to reforms of structural acceleration near-term balancing at aimed also It growth. economic of demand and debt expansion. aggregate Mauritius’ economic expansion has remained resilient resilient has remained economic expansion Mauritius’ economic in global the loss of momentum despite partners. trading some of our major for including activity, but the average potential, below remained Output has 6.7 to dropped has FY2018-19 for rate unemployment and subdued remained have per cent. Price pressures The to 1 per cent in June 2019. declined headline inflation to worsened to have account deficit is estimated current deficit trade as the merchandise 5.7 per cent in FY2018-19 Gross Nonetheless, per cent of GDP. 21.9 to accelerated all-time to an rose Reserves (GOIR) Official International representing million, or US$7,161 high of Rs253 billion goods of the country’s for almost a year import cover debt of the country is and services. external The gross GDP. per cent of about 15.5 to fallen have to estimated exchange rate stability and to ensure an adequate level of level an adequate stability ensure and to rate exchange market forex liquidityrupee adequate besides upholding liquidity. forecast institutions have multilateral Major international including the major advanced growth, that global economic further slow economies, would than initially and emerging the escalation of deeper malaise caused by The forecast. Republic the US and the People’s conflict between the trade Brexit, of a no-deal prospects of China and worsening on business sentiment, investment been weighing have Thriving remained benign globally. Inflation has and trade. to economies can pose challenges various debt in private inflation, muted and growth With slower financial stability. fiscal and monetary countries loosened to policies several support Uncertainty economic activity. has undermined as the domestic consumption leaving investment, private if sustained, Sluggish investment, main support growth. to capacity going forward, productive less new imply would prospects. on global growth weigh which would in the context The dynamics of the Mauritian economy calls environment of the challenging global economic As a small of economic resilience. a strengthening for the challenges caused face it is bound to open economy, sector external global uncertainties,for by specifically and financial channels. the trade management in both necessaryit is and stable low maintain vein, this In to fiscal deficit, a a low rate, exchange inflation, a stable account deficit and a current stable financial system in The continuous improvement levels. within reasonable is necessary and productivity generate to competitiveness sustained economic performance. In this momentum for be fortified. It is needs to the export structure regard, and boost and tourism, manufacturing strengthen to vital imports. the capability At reduce to domestic production reforms same time, it is necessary enhance structural to productivity, competitiveness, improve to sector in the real economic global The investment. sector and private be challenging in the short and would term environment is domestic economic environment ensuring a resilient among the major economic essential. The collaboration macroeconomic maintain to primordial partners remains to boost the The need stability. and financial system the wide-ranging given is welcoming economy digital creation, including employment opportunities provided, through and higher productivity price setting, effective of the digital The development efficiency. increasing economy, inclusive can also bring about a more economy small- and medium- for the opportunitiesgiven created Looking ahead, the Mauritian economy enterprises. sized for sound, amidst the flagging outlook remain would some of our trading including for economic growth, world uncertainty. partners and financial market The conduct of monetary policy during FY2018-19 was was The conduct of monetary policy during FY2018-19 stability economic preserve in a small open to conducive Repo of the Key The decision on the level economy. with the price stability of objective coherent was Rate and balanced economic the Bank while ensuring orderly open the Bank conducted Accordingly, development. remained Bill yield such that the 91-Day operations market The interest Rate. Repo its Key around within the corridor the attractiveness maintain to adequate was differential rate policy rate same time, exchange the At of domestic assets. in line with the broadly remained that the rupee ensured as an instrument its role playing fundamentals, economy’s factors. external from the economy mitigating shocks to for its interventions on the domestic foreign The Bank pursued via Special proceeds the rupee sterilised and market maintain to This allowed and above. Deposits of one year Broad money supply or domestic liquidity increased by 6.4 by domestic supply or liquiditymoney increased Broad an following at end-June 2019, as year-on-year cent per its components all of by backed of 9.4 per cent, increase supportive country’sof the requirements. remained and the continued in domestic liquidity reflected The growth Year-on- in claims on the domestic economy. expansion supported per cent, 7.4 by domestic claims expanded year, sector. in claims on the private the sustained increase by performance,In line with the commendable economic performance. a laudable recorded banking intermediation Banks higher. grew deposits bank and credit bank Both a high aggregate to thanks resilient, sound and remained ability and banks’ credit manage ratio to adequacy capital Banks’ liquidity conditions remained appropriately. risks sustained. The rupee exchange rate broadly reflected developments developments reflected broadly rate exchange The rupee real trade- On a financial markets. on the international against the basket depreciated basis, the rupee weighted On this partnersof trading in FY2018-19. of currencies the 1 per cent over nearly by depreciated basis, the rupee year. fiscal The country’s GOIR increased by Rs23 billion from Rs230 billion from Rs23 by The country’s GOIR increased to Rs253 billion (equivalent to 2018 billion at end-June the level, this At June 2019. million) at the end of USS7,161 country’s of the months 11.8 about finance would GOIR importsand servicesof goods of the about 95 per cent or also import services. goods and bills for total GOIR were short-term the country’s 330 per cent of estimated around of GOIR This level debt based on original maturity. external against the domesticeconomy buffer for a strong provides headwinds. external receipts and the surplus on the investment account. The account. The on the investment and the surplus receipts surplus of payments balance an overall country recorded direct gross as as well during FY2018-19 billion of Rs17.5 billion. of Rs17.4 inflows investment

Review of the Economy 42 Review of the Economy 43 Production quality of life Adopting an Import- Substitution Industry Adoption of a Sheltered of a Sheltered Adoption Scheme Farming SecurityBoosting the Food Programme of the Ocean Exploitation economy to infrastructure Improving support the manufacturing sector markets new into Tapping enhanced through economic diplomacy air connectivity Improving and encouraging community-based and and tourism inclusive tourism inclusive Construction of new of new Construction new medical hub, hospitals, cancer centre a Decent Dwelling Providing every family for of the Ensuring safety City with the Safe citizens Project Lifting the standard and and Reviving Export-Ledand Reviving • • • • • • • • • development Embracing innovation Embracing Securing sustainable Foster the development of the development Foster pole revolving growth a new Artificial Intelligence, around Technologies Blockchain and Fintech data promote to Incentives hosting activities and improved Scholarships attract to infrastructure graduates prospective licensable of new Creation activities of financial and Introduction to promote fiscal incentives Entrepreneurship Innovative Preparation of a full- Preparation fledged Land Drainage Plan Master of the Organisation Clean Up Mauritius and Embellishment Campaign – “Moris Nou Zoli Pei” • • • • • • • Pathways to a Transformative Transformative a to Pathways Journey to a High Income Country to Journey infrastructure caring society Modernising the land Modernising with the transport system project, Express Metro Decongestion the Road and the Programme and upgrading construction of roads the port a into Transforming hub regional airport of the new Extension terminal of a National Introduction Scheme Regeneration Developing soft in skills Developing training through the youth programmes in spirit Instil entrepreneurial under the graduates young Scheme SME Employment Enhancing the role and Enhancing the role participation in of women through our development, Gender mainstreaming support the Extending to improved through elderly facilities health and day-care Capitalising our youth on Creating an inclusive and an inclusive Creating Building strategic and modern and modern Building strategic • • • • • • • • Source: 2019-20 Bugdet Speech. Bugdet 2019-20 Source: Mauritius’ Growth Policy Policy Growth Mauritius’ 4.6 4.4 4.2 4.0 3.8 3.6 3.4 3.2 3.0 Per cent 2019* 2019* 2018 2018 2017 Investment GDP Growth (R.H.S) 2017 2016 2016 Public investment 2015 2015 2014 2014 Government Consumption Inventories 2013 2013 2012 Private investment 2012 2011 2011 Household Consumption Net Exports 2010 2010 Per cent 5.0 0.0 Per cent -5.0 30.0 25.0 20.0 15.0 10.0 -10.0 8.0 6.0 4.0 2.0 0.0 Gross National Savings (GNS) declined by 5.3 per cent in 5.3 per cent (GNS) declined by National Savings Gross million in Rs48,771 to million in 2017 Rs51,508 from 2018, 5.8 per by (GDS) fell Domestic Savings while Gross 2018 million in Rs43,078 to Rs45,738 million in 2017 cent, from to Gross ratio of GNS defined as the Rate, The Saving 2018. primary net Income (GNDI), excluding National Disposable per 11.1 from fell abroad, of GBC from income and transfer As a percentage 2018. per cent in 10.0 to cent in 2017 *Forecast. Statistics Mauritius. Source: some signs of Domestic export performance showed Exports of goods the end of 2018. stabilisation towards after 2.3 per cent in 2018, and services by rebounded Exports of goods per cent in 2017. 1.0 by contracting of 5.2 per a contraction 0.7 per cent, from by increased while exports earlier of servicescent a year recorded 3.4 per cent, partly of by driven annual growth faster Importshigher inbound tourism. of goods and services per of 1.4 an increase led by 0.4 per cent in 2018, by grew cent in importswhichfully offset of goods, the delicne of per cent in imports of services. 1.9 *Forecast. Statistics Mauritius and Bank staffSources: estimates. Chart of Public and Private Rates 2.2: Growth Investment Chart 2.1: Contribution to GDP Growth by Demand Demand by Growth GDP to Contribution Chart 2.1: Component -2.0 -4.0 -6.0 10.0 On the investment front, the contribution of Gross Fixed Fixed the contribution of Gross front, On the investment increased GDP growth real (GFCF) to Formation Capital investment infrastructure robust by underpinned in 2018, per cent in 2018 10.9 by expanded GFCF (Chart 2.1). The higher investment 4.7 per cent in 2017. to compared investment public sector with noticeable associated was as higher private as well per cent in 2018, of 12.7 growth per cent (Chart 2.2). Exclusive 10.4 of investment sector in growth and marine vessel, of aircraft of the purchase per cent 12.2 to 5.6 per cent in 2017 from GFCF rose of rate By type goods, the growth of capital in 2018. remained work’ on ‘building and construction spending a 45.3 per cent, supported mainly by at 10.3 buoyant Investment work’. construction in ‘other per cent growth per cent 12.1 by in ‘machinery soared and equipment’ after its sub-components, supported by broadly in 2018, activity investment In 2019, in 2017. moderately growing of implementation the ongoing benefit from would by grow to is forecast and GFCF projects infrastructure per cent. 7.9 Domestic demand continued to support growth during supportDomestic continued to demand growth consumption government specifically, More 2018. substantial increases posted and investment spending public sector vibrant mostly reflecting during the year, final activities. Aggregate building and construction 3.4 per cent in 2018 by grew expenditure consumption consumption Household in 2017. 2.9 per cent to compared by at 3.2 per cent, underpinned stable remained growth consumer and buoyant conditions labour market favourable expenditure consumption government sentiment. In 2018, 1.6 to of 4.2 per cent compared rate at a much faster grew expenditure of final consumption Growth per cent in 2017. per cent in 2019. at 3.1 is forecast Expenditure NationalProduction Income and path growth on a steady remained The domestic economy 3.8 per by prices growing GDP at market real with in 2018 GDP real that Quarterly showed data in 2017. as cent, same (y-o-y) 3.3 per cent year-on-year up from picked growth stabilising before 4.0 per cent in 2018Q4, to in 2018Q3 in 2018 Growth and 2019Q2. 2019Q1 at 3.4 per cent in services especially key activity brisk sectors, in reflected and insurance and communication’, ‘financial ‘information activities’ technical scientific and activities’, ‘professional, robust remained Growth trade’. retail and ‘wholesale and the ‘manufacturing’, However, sector. in the ‘construction’ service and food ‘accommodation activities’ and ‘real in real a moderation registered activities’ sectors estate growth side, robust On the demand in 2018. rate growth sustained and investment expenditure in consumption prices GDP at market In nominal terms, economic activity. while million in 2018, Rs481,256 5.3 per cent to by rose prices National Income (GNI) at market Gross per capita Rs384,792. 5.3 per cent to by increased

Review of the Economy 44 Review of the Economy 45 2019* Primary Secondary Tertiary 2018 Other Fin. & Ins. and Inf. & Comm. 2017 2016 19.6 2015 3.4 Accomm. & Food Service Whol. & Ret. Trade and Transp. & Storage 2014 2018 76.9 2013 2012 2011 Const. and R. Estate Manufacturing GDP Growth 2010 Per cent 5.0 4.5 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 -0.5 *Forecast. Statistics Mauritius. Source: per cent in 1.3 by contracted sector The ‘agriculture’ and sub-sector the dwindling ‘sugarcane’ reflecting 2018, 9.0 around by fell sugar prices. Sugar production lower 323,406 to in 2017 tonnes 355,213 from per cent in 2018, dropped cultivation under sugarcane and the area tonnes (Chart share The 2.6). hectares 47,678 to cent per 5 by per cent 11.6 from exports fell of sugar exports in total The fishing industry per cent in 2018. 7.3 to in 2017 by 28.7 increasing with fish production robust, remained 29,255 tonnes to in 2017 22,732 tonnes per cent, from exports preparations’ of ‘fish and fish The share in 2018. Source: Statistics Mauritius. Source: positively contributed sectors All the major economic in 2018, registered rate GDP growth the 3.6 per cent to contributions with the services making the largest sectors added in services be (Chart continued to 2.5). Value of 4.0 per cent in growth sustained, with an estimated cent per 5.0 nearly of average an than lower albeit 2018, Among major 2015. to phase of 2010 the high growth over the contributions of ‘financial of the economy, sectors ‘transportservices’, and storage’, trade’, ‘distributive The been noteworthy. have estate’ and ‘real ‘construction’ while still sector, the ‘manufacturing’ contribution from declined in 2018. positive, Sector Chart by GDP Growth 2.5: Contribution to 2019* 2018 2017 Primary Secondary Tertiary 2016 2015 Current Account Balance 2014 25.8 2013 Saving Rate 5.0 2012 2008 2011 69.2 2010 Resource Balance 2009 2008 5 0 -5 20 15 10 Per cent -10 -15 Chart of Primary, Secondary 2.4: Share and Tertiary cent Per in GVA, Sectors Production in the tertiary growth industry added terms, In value burgeoning the In particular, in 2018. robust remained continued to and communication’ sector ‘information the by followed sector, major growing fastest the be The secondary activities’ sector. ‘financial and insurance a by mainly underpinned industry grow, to continued while sector, in the ‘construction’ commendable growth due growth lower registered sector the ‘manufacturing’ sub- performances of the ‘sugar’ and ‘textile’ lacklustre to in the tertiary As growth industry sectors. continued to overall the in share value-added its sectors, other outpace 69.2 from per cent in 2018, further 76.9 to rose economy of the secondaryper cent in 2008. The share industry fell the same period per cent over 19.6 25.8 per cent to from 5.0 per cent while that of the primary declined from sector 3.4 per cent (Chartto 2.4). *Forecast. Chart and Rate Balance, Saving Resource 2.3: Balance Account Current of GDP at market prices, the Resource Balance (defined Balance (defined prices, the Resource market of GDP at per -6.1 from deteriorated Investment) minus as Savings principally reflecting in 2018, -8.6 per cent to cent in 2017 and 2017 to compared 2018 in of savings level a lower (Chart account deficit For 2.3). a higher current mirroring is GDP of percentage a as Balance Resource the 2019, per cent. -8.1 slightly to improve to expected 7.2 6.6 6.0 5.4 4.8 4.2 3.6 3.0 18 16 14 12 10 8 6 4 2 0 Per cent Per cent 2019* 2019* 2018 2018 2017 2017 2016 2016 (Annual Growth) Manufacturing 2015 2015 Real Estate (RHS) 2014 2014 2013 2013 Percentage Construction Distribution (R.H.S.) 2012 2012 2011 2011 2010 2010 5 0 -5 Chart 2.8: Real Growth Rate and Percentage Chart and Percentage Rate 2.8: Real Growth Sector Distributionthe Manufacturing of *Forecast. Statistics Mauritius. Source: service in the ‘accommodation and food activities’ Growth 4.6 per cent from per cent in 2018, 4.1 to moderated sector had a contribution of 0.3 The sector (Chart 2.10). in 2017 Tourist in 2018. GDP growth overall point to percentage *Forecast. Statistics Mauritius. Source: drivers one of the key remained sector The ‘construction’ 9.5 per cent, by and grew of economic activity in 2018 of public mainly on the back of ongoing implementation (Chart 2.9). The construction projects infrastructure in GDP growth point to 0.4 percentage contributed sector residential for While the number of building permits 2018. those in 2018, 6,760 to in 2017 6,377 from buildings rose the 484 over 526 to from buildings fell non-residential for continue to is forecast the sector 2019, same period. For in the of 8.5 per cent. Growth growth robust experiencing from 3.2 per cent in 2018, to slowed sector estate’ ‘real of some the unfolding with However, 3.4 per cent in 2017. is expected growth sector estate smart real city projects, a slightly higher by some momentum and grow regain to in 2019. rate in Construction and Real Growth Chart 2.9: GVA Estate Per cent 20 15 10 Per cent 5.0 4.5 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 -10 -15 490 460 430 400 370 340 310 280 250 9,000 16,000 15,000 14,000 13,000 12,000 11,000 10,000 '000 Tonnes Rs million 2018 2018 2017 2017 2016 2016 2015 Fish exports (RHS) 2015 Sugar production (RHS) 2014 2014 2013 2013 2012 2012 Fish production Cane production 2011 2011 2010 2010 0 The ‘manufacturing’ sector grew at a slower pace of 0.7 at a slower grew sector The ‘manufacturing’ (Chart per cent in 2017 1.5 to compared per cent in 2018 the in both a contraction due to 2.8). The decline was The ‘sugar milling’ sub-sectors. ‘sugar milling’ and ‘textile’ as against per cent in 2018 19.0 by contracted sub-sector contracted while ‘textile’ of 2.4 per cent in 2017, a growth by operators faced difficulties 6.8 per cent, reflecting by sector the manufacturing added by Value in the sector. per cent of total 12.9 decline and represented continued to the sector In 2019, in 2018. added in the economy value 0.8 per cent, partly by supported by grow to is expected boost export competitiveness. to budgetary measures Source: Statistics Mauritius. Source: Source: Statistics Mauritius. Source: and ExportsChart Fish Production 2.7: Chart and Sugar Production 2.6: Cane in total domestic exports rose from 19.9 per cent in per cent 19.9 from domesticexports rose in total the (Chart 2.7). Following per cent in 2018 22.1 to 2017 been provided have incentives new Budget, 2019-20 seafood and fisheries the expand and consolidate to to projected is sector agricultural the In 2019, industry. in increase cent, based on an estimated 3.4 per by grow 325,000 tonnes. around to sugar production '000 Tonnes '000 Tonnes 5,000 4,600 4,400 4,200 4,000 3,800 3,600 3,400 3,200 3,000 35,000 30,000 25,000 20,000 15,000 10,000

Review of the Economy 46 Review of the Economy 47 12.2 12.1 12.0 11.9 11.8 11.7 11.6 11.5 Per cent 2019* 2018 2017 2016 Growth rate 2015 2014 2013 2012 Percentage in GVA (RHS) 2011 2010 * Forecast. Statistics Mauritius. Source: remained and communication’ sector The ‘information unchanged per cent in 2018, 5.5 by and grew resilient added 0.2 percentage sector The (Chart 2.13). 2017 from be to and continued in 2018 GDP growth real point to computer both higher demand for by underpinned services communication. The number of mobile and data has inhabitants 100 per subscriptions telephone cellular in 2018, 151.6 to in 2015 139.5 from steadily increased individuals. Internet by suggesting multiple subscriptions an average from considerably, access has also improved 107.1 to in 2015 inhabitants per 100 of 66.6 subscriptions at a slightly grow to is projected The ICT sector in 2018. though the sector’s even of 5.4 per cent in 2019 rate lower unchanged at 4.2 per remain to is expected in GVA share cent. The ‘financial and insurance activities’ sector grew by grew sector activities’ and insurance ‘financial The per cent than the 5.5 slightly lower in 2018, 5.4 per cent ‘monetary with intermediation’ in 2017, registered growth funding’ sub- and pension reinsurance and ‘insurance, cent and of 5.7 per growth lower registering sectors in ‘financial, leasing Growth 4.8 per cent, respectively. unchanged at 6.5 remained granting’ credit and other financial intermediaries’ ‘other while in 2018 cent per 3.8 to compared of 4.5 per cent solid growth registered activities’ and insurance The ‘financial per cent in 2017. GDP growth real point to percentage added 0.6 sector The pace of economic activity is sector of the in 2018. (Chart 2.12). 5.2 per cent in 2019 to moderate to expected Sector of Financial and Growth Share Chart 2.12: Per cent 5.8 5.6 5.4 5.2 5.0 4.8 4.6 4.4 7.3 7.1 6.9 6.7 6.5 6.3 6.1 5.9 70,000 65,000 60,000 55,000 50,000 45,000 40,000 35,000 Per cent Rs million 2019* 2018 2018 2017 2017 2016 2016 Growth rate 2015 Tourism receipts (RHS) 2015 2014 2014 2013 2013 2012 Percentage in GVA (RHS) Total tourist arrivals 2012 2011 2011 2010 2010 Sources: Statistics Mauritius and Bank of Mauritius. Sources: * Forecast. Statistics Mauritius. Source: Receipts and Tourism Arrivals Tourist Chart 2.11: Chart 2.10: Share and Growth of Accommodation of Accommodation and Growth Share Chart 2.10: Serviceand Food Activities arrivals increased by 4.3 per cent in 2018, supported by supported by in 2018, per cent 4.3 by increased arrivals (11.7 Germany (4.3 per cent), France from higher arrivals per (14.2 Africa South and cent) per (1.4 UK cent), per Rs64 were the year for earnings tourism cent). Gross billion in 2017 Rs60.3 6.2 per cent, from by billion, higher by rose tourist arrivals half of 2019, In the first (Chart 2.11). the of 3.4 per cent for a growth to 0.5 per cent compared 87.7 by rose sea by arrivals Tourist period in 2018. same while ships, number of cruise higher by per cent, driven per of 1.3 a contraction air registered by arrivals tourist higher were arrivals markets, source cent. Among major (4.0 per cent) and per cent), Germany (4.1 France from the performance of per cent). However, South Africa (1.1 Island as the UK, Reunion such markets traditional other been China – have – India and markets and emerging forecast is sector the 2019, For disappointing. rather per cent as it of 1.8 rate lower at a relatively expand to with uncertainty fraught remains in the light of global and domestic economic conditions. 9 8 7 6 5 4 3 2 1 0 ('000) 10 Per cent 950 850 750 1,050 1,150 1,250 1,350 1,450 , one of the measure , one of the measure 1 Wage Rate Index Rate Wage costs of changes in labour reflective Index, Rate The Wage by nominally increase to continued the economy, across years. annually in recent 4-5 per cent Nominalaround by driven per cent in FY2018-19, 4.2 by grew wages private the for index The wages. sector private in increases underpinned cent in FY2018-19, 5.3 per by rose sector in sectors higher wages such as manufacturing (9.5 per by per cent) cent), administrative and support (7.9 activities retailand wholesale and trade and transport and storage public sector the for each). The index (6.3-6.4 per cent per cent, on account of higher wages 2.8 by increased per cent), electricity (8.3 in financial and insurance (10.8 per cent) and transport and storageper cent). The (6.4 per cent 1.2 General Government by for increased index in FY2018-19. Unemployment and Employment Labour Force, Household Based on the Continuous Multi-Purpose workers, of foreign inclusive labour force, the total Survey, of which 374,100 2018 the year for at 613,200 stood The number of females. were males and 239,100 were 28,400 from increased force labour in the workers foreign primarily were workers These 29,400 in 2018. to in 2017 namely in the economy, major sectors in four employed (6.8 per per cent), ‘construction’ (81.3 ‘manufacturing’ servicecent), ‘accommodation and food activities’ (2.4 and communication’ (2.0 per per cent) and ‘information cent). 586,900 from contracted The Mauritian labour force the in increase an despite in 2018, 583,800 to 2017 in 984,000 to from and over years population aged 16 the same period. The combined effectof 990,900 over in the the rise in the population (+6,900) and the drop inactive the in rise a to contributed (-3,100) labour force activitythe in fall a consequently and 10,000 by population 58.9 per cent in 2018. to 59.6 per cent in 2017 from rate labour force the potential However, of labour underutilisation, declined from 5,800 in 2017 to to 5,800 in 2017 declined from of labour underutilisation, Statistics Mauritius has estimated In 2019, 3,800 in 2018. 589,300. around to increase to the domestic labour force was workers, including foreign employment, Total 573,500 per cent from 0.1 around by down marginally total in fall slight The 2018. in 573,100 to 2017 in in male drop a mainly reflected in 2018 employment in an increase (-2,000) which outweighed employment change of sectoral In terms (+1,600). employment female was higher employment in 2018, employment in total (+100), sector in the ‘construction’ mainly registered in declines in employment than offset by more but was and forestry and ‘agriculture, (-300) ‘manufacturing’ the by faced fishing’ (-200) amid the challenging environment 8.2 8.0 7.8 7.6 7.4 7.2 7.0 6.8 6.6 6.4 6.2 5.1 4.9 4.8 4.6 4.5 4.3 4.2 4.0 Per cent Per cent 2019* 2019* 2018 2018 2017 rate (RHS) 2017 Unemployment 2016 Growth rate 2016 2015 Change in 2015 unemployment 2014 2013 2014 Percentage in GVA (RHS) 2012 Change in employment 2013 2011 2012 2010 0 Number 9 8 7 6 5 * Forecast. * Forecast. Statistics Mauritius. Source: Chart 2.14: Unemployment Rate, Change in Change Rate, Unemployment Chart 2.14: and Unemployment Employment Labour market conditions remained favourable in 2018, in 2018, favourable conditions remained Labour market 6.9 per cent, the to falling rate with the unemployment Unit labour cost increased (Chart 2.14). since 2001 lowest in labour of an acceleration pace as a result at a slower performance is likely Labour market growth. productivity in creation as employment in the medium term improve to trade’ ‘wholesale and retail such as ‘construction’, sectors be sustained to is expected and ‘public administration’ job losses in ailing sectors. potential and could outweigh pertaining Budget in the 2019-20 measures Moreover, of the SME such as the extension the labour market to of a National Scheme and the creation Employment youth address to expected are Platform Skills Matching unemployment. LABOUR MARKET DEVELOPMENTS LABOUR MARKET DEVELOPMENTS * Forecast. Statistics Mauritius. Source: Chart 2.13: Share and Growth of ICT Sector and Growth Share Chart 2.13: 12 11 10 Per cent 8,000 6,000 4,000 2,000 -2,000 -4,000 16,000 14,000 12,000 10,000

Review of the Economy 48 Review of the Economy 49 Services 0.2 Goods and Miscellaneous 0.2 and Hotels Restaurants -0.2 Education and Culture 0.0 Recreation 0.0 Communication -0.5 Transport 0.1 Health 0.1 Household Equipment,. Furnishings, 0.0 Water, Gas an Housing, Electricity, Other Fuels and 0.1 Clothing Footwear and 0.1 Tobacco Alcoholic Beverages and 0.5 Food Beverages Non Alcoholic Per cent 0.6 0.4 0.2 0.0 -0.2 -0.4 -0.6 month compared to the same month of the preceding month of the preceding the same to month compared reflecting path, albeit moderate, contrasting showed year, of the impact as a result dynamics in the CPI the inherent some and to of vegetables in the prices of gyrations 1.0 from up went inflation effect. base the Y-o-y extent, 2018 per cent in December 1.8 to per cent in June 2018 on account 0.6 per cent in June 2019 to receding before fresh in the prices of both adjustment of the downward goods. and some administered vegetables 0.6 per cent, 0.6 point, or by Overall, CPI increased the The 2019. in June 103.4 to June 2018 in 102.8 from and ‘Food were the CPI increase main contributors to by followed per cent), (0.5 beverages’ non-alcoholic ‘Restaurants ‘Miscellaneous (0.2 per cent), and hotels’ goods and services’ (0.2 per cent), ‘Alcoholic beverages (0.1 footwear’ per cent), ‘Clothing and (0.1 and tobacco’ household equipment and routine per cent), ‘Furnishings, ‘Health’ (0.1 per cent) and, (0.1 household maintenance’ partially were per cent). These increases offset declines by division and 0.2 per of 0.5 per cent in the ‘Transport’ divisions remaining cent in the ‘Education’ division. The shows the negligible contributions. Chartrecorded 2.15 the change in CPI during divisions to main contributors by the period under review. the Change Divisions to by Contribution Chart 2.15: and June 2019 June 2018 in CPI between The underlying inflationary pressures, as reflected in reflected as inflationaryThe underlying pressures, of inflation, CORE1 and CORE2 measures the Bank’s On a 12-month subdued during FY2018-19. remained 2.6 per cent in fell from basis, CORE1 inflation average CORE2while 2019, June in cent per 1.5 to 2018 June Sources: Statistics Mauritius and Bank of Mauritius StaffSources: calculations. Inflation Core The potential labour force refers to those who are available for work but not looking for work and those who are looking for work but not available for work in a reference week. These week. in a reference work for available but not work for looking and those who are work looking for but not work for available those who are to refers labour force The potential individuals are considered to be unemployed as per the ILO definition. as per the ILO be unemployed to considered individuals are 1 Domestic inflation in FY2018-19 remained at low levels levels low at remained FY2018-19 in Domesticinflation global economic of moderate against a background global inflation and subdued domestic low activity, by demand conditions. Headline inflation, as measured Consumer average change in the yearly the percentage and reached on a downtrend (CPI), remained Price Index inflation, Y-o-y per cent in June 2019. of 1.0 a trough change in the CPI of a given defined as the percentage PRICE DEVELOPMENTS In the ‘manufacturing’ sector, average compensation In the ‘manufacturing’ sector, labour than pace faster much a at grew employees of 2.4 driving unit labour cost higher by thereby productivity, per cent of 0.1 a slight drop to compared per cent in 2018 In US dollar terms,cost the rise in unit labour in 2017. dynamics Similar cent. at 4.3 per pronounced more was with unit labour cost observed were in the export sector, rupeein cent per 6.9 of rate higher a at terms increasing and 8.8 per cent in US dollar terms. With demographic of a drag become more on population to changes foreseen in the longer term, productivity growth and employment future be the most channel for prominent may growth economic growth. Labour productivity, a key determinant of competiveness determinant competiveness of a key Labour productivity, Labour performance,gains and growth in 2018. improved to productivity 2.4 per cent in 2017 from rose growth averagewhile compensation of in 2018 cent per 3.7 5.2 per cent 4.8 per cent to from increased employees unit labour cost, the same period. Consequently, over the remuneration of labour per unit of which measures to compared per cent in 2018 1.4 by output, increased in US dollar terms, unit However, 2.3 per cent in 2017. the of 3.3 per cent due to labour cost at a higher rate rose per cent against the US of the rupee 1.8 appreciation by dollar in 2018. Productivity and Unit Labour Cost The unemployment rate fell from 7.1 per cent in 2017 to to 2017 per cent in 7.1 from fell rate The unemployment The since 2001. level the lowest in 2018, 6.9 per cent of a decline the result was rate in the unemployment fall in the fall surpassed which (-3,100) in the labour force number of the reducing thereby (-1,400), employment the number of unemployed In 2019, 1,700. by unemployed 300 and the unemployment by decline slightly is projected per cent. 6.8 to drop to is forecast rate these sectors. Employment of Mauritians is projected to to is projected of Mauritians Employment these sectors. in 2019. 549,500 reach 5,800 to by increase Other Sectors Claims on on Central Net Claims SOURCES Government Jun-19 Assets Net Foreign Jun-18 Debt securities Jun-17 Foreign Deposits Currency COMPONENTS Rupee Deposits Jun-16 Currency with Public 0

75,000

675,000 600,000 525,000 450,000 375,000 300,000 225,000 150,000 Y-o-y, the net foreign assets (NFA) of depository (NFA) assets foreign the net Y-o-y, Rs592.0 to cent per 2.6 by contracted (DCs) corporations mainly a decline of reflecting billion as at end-June 2019, depositoryof other corporations NFA per cent in the 10.1 Costs (PPI-A)Price Inflation-Agriculture and Producer Both FY2018- (PPI-M) in Inflation-Manufacturing Price Producer down went PPI-M Y-o-y levels. moderate at remained 19 cent in June per 1.7 to 2018 June 2.9 per cent in from food of manufacturing the in prices lower reflecting 2019, PPI-Anegative in remained Y-o-y and beverages. products subdued inflationary on account of pressures territory, & animal and animals products prices of crop the in PPI-Aper cent in June 2019, at -5.8 stood Y-o-y products. the 12-month Over per cent in June 2018. -12.8 up from 2.5 per 2.6 per cent to from down period, PPI-M edged while PPI-A -2.0 per eased from also cent in June 2019 -4.5 per cent in June 2019. cent to AND KEY AGGREGATES MONETARY RATIOS MONETARY in FY2018- Liabilities (BML) slowed Money in Broad Growth and the all of its components by albeit being backed 19, continued sector private the to loans of growth overall of BML rate The annual growth uptrend. on a gradual per 6.4 to 2018 end-June at 9.4 per cent as from slowed consistent broadly was and cent at the end of June 2019 with public Currency in GDP. with the nominal increase 3.3 per cent and 5.4 per by and deposit liabilities rose 2.2 per cent to compared in FY2018-19 cent, respectively, Debt securities included per cent in FY2017-18. and 7.1 35.6 per cent pace of at much slower in the BML grew FY2017-18. in cent per 201.1 to compared FY2018-19 in from slowed BML in included deposits rupee in Growth 4.7 per cent in FY2018-19. to 6.4 per cent in FY2017-18 of BML as and sources the components shows Chart 2.18 and 2019. 2018 2017, at end-June 2016, of BML, Rs Components and Sources Chart 2.18: million

Jun-19 Jun-19

May-19 May-19

Apr-19 Apr-19

Mar-19 Mar-19

Feb-19 Feb-19

Jan-19 Jan-19

Dec-18 Dec-18

Nov-18 Nov-18

Oct-18

Oct-18 CORE2

CORE2

Sep-18 Sep-18

Aug-18 Aug-18

Jul-18 Jul-18

Jun-18 Jun-18

CORE1

May-18 CORE1 May-18

Apr-18 Apr-18

Mar-18 Mar-18

Feb-18 Feb-18

Jan-18 Jan-18

Headline Inflation

Dec-17 Dec-17

Year-on-year

Nov-17 Nov-17

Oct-17 Oct-17

Sep-17 Sep-17

Aug-17 Aug-17

Jul-17 Jul-17

Jun-17 Jun-17 Per cent Per cent 5.5 5.0 4.5 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 7.0 6.0 5.0 4.0 3.0 2.0 1.0 0.0 (1.0) (2.0) Inflation expectations (headline) assessed in the surveys (headline) expectations Inflation drifted down, the Bank during FY2018-19 out by carried mean The inflation. headline low prevailing the with line in per 5.1 year ahead eased from for a expectation inflation 3.9 per cent in to 2018 cent in the survey month of May and further 2.8 per to 2018 the survey month of November 2019. cent in the survey month of May Inflation Expectations Sources: Statistics Mauritius and Bank of Mauritius StaffSources: calculations. Sources: Statistics Mauritius and Bank of Mauritius StaffSources: calculations. Inflation (Y-o-y) CPI and Core Chart 2.17: Chart 2.16: Headline and Core Inflation (12-Month Inflation (12-Month Headline and Core Chart 2.16: Average) inflation remained unchanged at 1.9 per cent compared 1.9 per cent compared at unchanged remained inflation On a y-o-y at basis, CORE1 inflation stood 2018. June to per 2.6 to compared lower cent in June 2019, -0.2 per remained while CORE2 inflation also 2018, cent in June cent. per at 1.4 and closed FY2018-19 levels at moderate of headline and core the movements shows Chart2.16 June 2019 through June 2017 the period over inflation of CPI and the y-o-y shows movements while Chart 2.17 the same period. over inflation core

Review of the Economy 50 Review of the Economy 51 5.3 6.0 6.6 0.5 4.6 0.90 10.2 111.4 111.9 Jun-19 29,698 22,852 103,453 103,453 500,221 500,221 552,770 552,770 7.9 5.5 6.3 8.8 6.3 0.91 20.7 88.8 110.3 Jun-18 93,861 93,861 10,784 10,784 29,563 518,398 518,398 478,050 478,050 6.1 7.9 6.2 9.0 8.9 0.94 10.0 22.5 106.8 5,713 5,713 Jun-17 77,763 77,763 27,804 27,804 476,601 476,601 443,084 6.1 6.2 3.2 9.5 10.1 0.97 10.3 28.8 103.6 4,663 Jun-16 70,691 70,691 25,760 25,760 437,190 437,190 406,767 406,767 7.4 5.8 5.8 9.4 8.2 9.5 99.1 1.01 18.1 27.6 per cent in FY2017-18. Domestic claims went up by up by Domestic went claims in FY2017-18. per cent 27.6 on claims in net the increase cent, mostly20.6 per due to in Government drop the arising from Governments Central deposits. the frequency to refers which The income velocity of money, to edged down of monetary in an economy, transactions June of end the at 0.91 from 2019, June of end the 0.90 at economic agents’ preference reflecting somewhat 2018, The average effecting transactions. for money keeping for and downtrend its maintained multiplier money broad 5.3 as to 5.5 as at end-June 2018 further from dropped as the monetary a at base expanded at end-June 2019, GDP ratio, to BML. The BML to higher pace compared its maintained of financial depth, which is an indication end- at as 111.4 to 2018 at end-June as 110.3 from uptrend, edged down GDP ratio with public to Currency June 2019. the increased extent to some 6.0, reflecting 6.3 to from services with internet payment together use of card-based details gives 2.1 Table and mobile banking transactions. through ended June 2015 the years on monetary for ratios June 2019. to 3,620 Jun-15 68,506 23,350 370,109 370,109 397,079 397,079 1 III. BML to GDP III. BML to IV. Currency with Public to GDP with Public to Currency IV. I. Currency outside DepositoryCorporations I. Currency II. Deposit Liabilities III. Debt Securities I. Income velocity of Money Supply (BML) I. Income velocity of Money II. Average Broad Money Multiplier Money Broad II. Average The average Money Multiplier for Broad Money Liabilities is defined as the ratio of average Broad Money Liabilities to average Monetary Base. average to Liabilities Money Broad average ratio of Liabilities is defined as the Money Broad Multiplier for Money The average Figures may not add up to totals due to rounding. due to totals add up to not may Figures 1 Figures in italics are year-on-year change in per cent. year-on-year are in italics Figures A. Monetary Base 1. Monthly Average for year ended (Rs million) year for Monthly Average 1. Liabilities (BML) Money B. Broad

2. Selected Monetary2. Selected cent) Ratios (Per

The monetary base contracted by 3.0 per cent, from 3.0 per cent, from by The monetary base contracted billion Rs105.7 to billion at the end of June 2018 Rs109.0 per 35.1 of increase againstas an 2019, June of end the at by mainly driven was The drop year. cent in the preceding per cent in banks’ deposits held with the the decline of 7.1 than offset the rise of 6.1 Bank of Mauritius, which more side of On the sources in circulation. per cent in currency of the monetary NFA base, among the main components, to compared 9.9 per cent in FY2018-19 by the Bank grew (ODCs) which more than offset 9.9 per cent the rise of more (ODCs) which the Mauritius. In FY2017-18, of the Bank of in the NFA billion. Domestic claims of at Rs607.6 stood of DCs NFA Rs559.3 per cent to 7.4 by rose depositorycorporations in cent recorded per of 1.3 a drop to billion, compared by grew Government Central claims on Net FY2017-18. driven billion as at end-June 2019, Rs81.2 per cent to 14.5 in ODCs’ holdings of the increase by extent a large to other of claims on The expansion Securities. Government at 6.6 was steady derivatives) financial (excluding sectors 6.7 to compared ended June 2019, the year per cent over 2018. per cent at end-June Table 2.1: Monetary Ratios 2.1: Table

Maintenance of Cash ReserveMaintenance Ratio the fortnightly minimum cash reserve During FY2018-19, on their rupee maintain to required that banks are ratio unchanged remained deposits currency and foreign Banks’ respectively. at 9.0 per cent and 6.0 per cent, Rs7.6 between ranged reserves excess rupee average and the annual billion in FY2018-19 billion and Rs16.9 billion, at Rs12.2 stood reserves excess rupee average The year. financial the previous Rs8.0 billion in from up banks and a few towards liquidity skewed was excess banks. The average included voluntaryby held reserves banks ranged held by reserves excess currency foreign and and Rs22.6 billion in FY2018-19 Rs9.4 billion between billion, Rs14.5 out to worked reserves the annual average In sum, the rise in Rs9.7 billion in FY2017-18. to compared foreign by mainly driven was cash ratio average the overall partly reserves with banks’ serving cash ratio, currency their meet high quality to assets liquid as unencumbered Ratio. Chartevolution the shows 2.20 Liquidity Coverage cash rupee cash holdings and average rupee of excess ratio. Loans granted to the ‘Accommodation and food service and food ‘Accommodation the to Loans granted billion Rs37.6 cent to per 3.1 by fell sector activities’ mainly 2019, and end-June 2018 end-October between ‘Resort As a Hotels’. from net-repayments reflecting 12.9 from loans declined bank in total its share result, in the operators by per cent. Borrowings 12.3 per cent to Rs21.3 per cent to 6.8 by dropped sector ‘Manufacturing’ in loans decrease on account of the billion, most notably The sub-sector. products’ of food the ‘Manufacture to bank loans fell in total sector of the ‘Manufacturing’ share per cent 7.0 to 2018 at end-October per cent as 7.6 from accounted sector The ‘Construction’ as at end-June 2019. 2019, end-June at as loans bank total of cent per 5.8 for at end- of 6.8 per cent as its share to compared lower contracted this sector to Loans extended 2018. October in net-repayments by explained largely cent, per 13.2 by Loans granted of Buildings’ sub-sector. the ‘Construction decreased and fishing’ sector forestry the ‘Agriculture, to 2019, billion as at end-June Rs13.7 per cent to 12.2 by and animal the ‘Crop in loans to the fall primarily due to service activities’ sub- hunting and related production, down edged sector the of share the Consequently, sector. hand, bank 4.5 per cent. On the other 5.2 per cent to from by increased activities’ sector estate the ‘Real lending to This billion as at end-June 2019. Rs14.5 3.8 per cent to as bank loans of total 4.8 per cent for accounted sector 4.7 per to higher compared marginally at end-June 2019, 2018. cent as at end-October

6,000

5,500

5,000

4,500

4,000

3,500

3,000

2,500

2,000

1,500

1,000 500

3

0

-500

-1,000

-1,500

-2,000

-2,500 -3,000 Others Households to Other Nonfinancial Corporations, Nonfinancial Other Corporations, to Construction Manufacturing 2 Real estate activities Other Financial Corporations Agriculture, forestry and fishing Public nonfinancial corporations Loans include only facilities extended by banks in the form of loans, overdrafts and finance leases. of loans, overdrafts banks in the form by extended Loans include only facilities and Public Nonfinancial Corporations. include only Other Financial Corporations Other sectors Households and Other Sectors Households Chart 2.19: Contribution to Increase in Bank Loans Increase Contribution to Chart 2.19: Rs million 2019, and June 2018 October Between Bank loans to the private sector (excluding GBCs) (excluding sector the private Bank loans to Rs301.4 billion, from per cent or Rs3.1 1.0 by expanded billion as at Rs304.5 to 2018 billion as at end-October from additional borrowings reflecting end-June 2019, Household borrowings corporates. households and both 5.6 per cent or Rs5.7 billion between by increased due to largely and end-June 2019, 2018 end-October housing purposes. for of facilities households availing share lion’s up the Mortgages, make to which continued 5.5 per cent or Rs3.6 up by households, went of loans to Financial Corporations Other in loans to billion. The growth in bank lending to the increase supported by largely was and Other Financial Intermediaries’ ‘Financial Auxiliaries by contracted ONFCs Loans to and ‘Holding Companies’. and 2018 October 5.3 per cent or Rs8.4 billion between and forestry ‘Agriculture, The ‘Construction’, June 2019. technical activities’ scientific and fishing’, ‘Professional, more to contributed together sectors and ‘Manufacturing’ ONFCs (Chart in loans to than 90 per cent of the decrease some by repayments decline also reflected The 2.19). the issue of bonds, the proceeds arising from corporates part obligations. loan outstanding of repay to went which of The Bank introduced a new format for the collection and the collection for format a new introduced The Bank sector. the private to of statistics credit on bank compilation October as from disseminated was which report, The new and (including overdrafts on loans details provides 2018, to Other Nonfinancial banks by finance leases) disbursed Public Nonfinancial (ONFCs), Households, Corporations Loans Corporations. and Other Financial Corporations Nations classified as per the United ONFCs are to Industrial of All Classification Standard International households as loans to (‘ISIC’) and Economic Activities of the loans. per the purpose 2 3 Bank Loans Accommodation and food service activities Professional, scientific and technical activities Electricity, gas, steam and air conditioning supply

Review of the Economy 52 Review of the Economy 53 According to IMF Financial Access Survey (FAS) data data Survey (FAS) IMF Financial Access to According period ending the ten-year over the Bank, by compiled deposit accounts number of bank the 2018, December from rose above and years Mauritian aged 15 held per this to loan amount while the outstanding 2.16 to 2.11 Rs0.28 to million Rs0.19 from rose population segment million per person. doubled accounts mobile money The number of active The number of mobile in 2018. 0.14 to in 2017 0.07 from per Mauritian transactions payments’ banking and mobile 1.2. 0.9 to from rose and above years population aged 15 per person banking transactions The number of internet up from 0.45 in 2018, to segment grew of this population are which transactions, of card value Total in 2017. 0.37 and Merchant ATMs debit cards, cards, credit to related a five- 3.0 per cent over nearly by of Sale, increased Points Rs20.2 billion to billion in 2013 Rs15.7 period, from year in 2018. financial access to having are women more Gradually, and services. in December products The gender gap fell male to female of number the both of terms in 2018 of amount outstanding relative their and depositors of end the at 0.66 from rose ratio latter The deposits. Of 0.68 as at end-December 2018. to December 2017 of the a percentage deposits as outstanding female note, per cent as at 16.7 from population increased female total end-December at as cent per 17.4 to 2017 end-December 2018. rose depositors the number of SME indicators, per FAS As about 40,000 as at end-December 3 per cent to around by while the number of SME deposit accounts at 2018 about 52,000. per cent to 2 around banks edged up by of total as a percentage The number of SME depositors 2.03 per per cent to 1.98 from rose banks’ depositors the number of SME deposit accounts as a cent. Similarly, banks’ deposit accounts commercial of total percentage amount per cent. The total 2.31 per cent to 2.27 from rose under the Small and Medium approved facilities of credit of Small and (inclusive Financing Scheme Enterprises million) rose under Rs10 with a turnover Enterprises Micro to Rs8.6 billion in 2017 per cent, from than 13 more by December 2011). as from (cumulated Rs9.7 billion in 2018 Cooperative Unionsand Credit number of Credit The total further 205 in 2018, to in 2017 178 from Institutions rose financial access of SMEs. contributing to . 14.0 13.0 12.0 11.0 10.0

Per cent Jun-19

May-19

Apr-19

Mar-19

Feb-19 Jan-19

Average Cash Ratio (RHS)

Dec-18

Nov-18

Oct-18 Sep-18

Excess Cash Holdings

Aug-18

Aug-18 Jul-18 Financial inclusion refers to the access of individuals and to Financial inclusion refers products financial affordable and useful to businesses and sustainable in a responsible and services, delivered financial access, Besides enhancing conventional way. access to facilitate to the Bank has endeavoured to Mauritians financial products advanced technologically to traditional financially-integrated already who are and services.financial products FINANCIAL ACCESS AND INCLUSION FINANCIAL ACCESS The weighted average rupee deposit rate of banks picked of banks picked deposit rate rupee average The weighted per cent in 1.74 to in July 2018 per cent 1.65 up from per cent in June 2019. 1.71 to dropped but 2019, March moved hardly lending rate average Banks’ weighted 6.23 per cent from and inched down during FY2018-10 The spread 6.22 per cent in June 2019. to in July 2018 lending and deposits rates average the weighted between 4.48 per cent and 4.68 per cent during between varied per cent of 4.45-4.64 a range to compared FY2018-19 year. during the preceding The Key Repo Rate (KRR) was kept unchanged at 3.50 kept was (KRR) Rate Repo The Key during held MPC meetings per cent per annum at the four banks an unchanged KRR, several Despite FY2018-19. (SDR), as the Deposit Rate up their Savings had adjusted but left their Bills increased yields on short-term Treasury (PLR) unchanged. Banks’ SDR, which Prime Lending Rate rose per cent in July 2018, 1.20-2.00 between fluctuated and further 1.35- to 2018 per cent in August 1.35-2.00 to same till and remained 2018 per cent in September 2.10 range a within unchanged remained PLR The 2019. June of 5.65-8.50 per cent during FY2018-19. Interest Rate Interest Chart Holdings and Cash 2.20: Rupee Excess Rupee Ratio Cash Average Rs million 7,000 10,000 13,000 16,000 19,000

2018 2018

2017 2017

2018 2016 2016

2015 2015

2014 2014

2013 2013

2012 2012

2017 2011 2011

2010 2010

Number of ATMs 2009 2009

Number of branches

2008 2008

per population aged 15 and above 2007 2007 Number of active Mobile money accounts

per 100,000 population aged 15 and above per 100,000 population aged 15 and above per 100,000 population aged

2016 2006 2006

2005 2005

2004 2004

50 46 42 38 34 30 0.3 0.2 0.1 0.0 21 20 19 18 17 16 15

2018 2018 2018

2017 2017 2017

2016 2016 2016

2015 2015 2015

2014 2014 2014

2013 2013 2013

2012 2012 2012

Credit unions and credit cooperatives

2011 2011 2011

2010 2010 2010

2009 2009 2009

2008 2008 2008 Number of deposit accounts Number of deposit Number of Loan accounts at

Commercial Banks (thousand)

2007 2007 2007 Commercial banks

per 1,000 population aged 15 and above per 1,000 population aged

Number of Other Depository Corporations

2006 2006 2006

2005 2005 2005

2004 2004 2004 0 50 80 250 200 150 100 680 580 480 380 280 180 Indicators of Financial Access of Financial Indicators 2,400 2,300 2,200 2,100 2,000 1,900 1,800

Review of the Economy 54 Review of the Economy 55 0 -2 -4 -6 -8 -10 -12 -14 -16 Per cent of GDP 2018-19 2017-18 2016-17 Balance 2015-16 Current Account 2014-15 2013-14 Total exports (f.o.b.) increased by Rs3.2 billion, or 4.0 Rs3.2 billion, or by exports (f.o.b.) increased Total cent of GDP) in per 16.8 Rs78.9 billion (or from per cent, of GDP) in per cent billion (or 16.7 Rs82.1 to FY2017-18 exports the in of ‘Ship’s the pick-up reflecting FY2018-19, ‘Domestic exports’ and ‘Re-exports’. and bunkers’, stores and Stores ‘Ship’s On a y-o-y exports, basis, excluding on account of in FY2018-19 2.0 per cent by rose Bunkers’, than offset more in “Fish” (+4.9 per cent), which increase of (-2.2 per cent), and “Articles in “Cane sugar” the fall All these per cent). (-1.5 accessories” & clothing apparel exports. total 60.2 per cent of represented categories three on the services Rs33.3 The surplus declined from account Rs30.2 to per cent of GDP) in FY2017-18 billion (or 7.1 lower due to billion (or 6.2 per cent of GDP) in FY2018-19 declined from earnings tourism Gross receipts. tourism billion in FY2018- Rs61.6 to Rs64.4 billion in FY2017-18 on the primary The surplus account increased income 19. Rs58.9 billion in to billion in FY2017-18 Rs50.1 from The deficit on the secondary income account FY2018-19. the same Rs9.4 billion over Rs9.9 billion to declined from of the components the main shows period. Chart 2.21 FY2018-19. through FY2006-07 for account current 23.1 per cent of total imports, respectively, in FY2018-19. imports, respectively, of total per cent 23.1 account, inclusive of GBLHs’ transactions, is estimated is estimated of GBLHs’ transactions, account, inclusive of Rs285.5 billion in outflows net recorded have to was that there shows breakdown The asset FY2018-19. in equity with a turnaround coupled of investment a fall residents by of debt instruments disinvestments net to a turnaround was On the liability side, there abroad. from in FY2017-18 non-residents by investments net from Non-residents’ in FY2018-19. disinvestments net to domestic market the capital from disinvestments net net to compared Rs2.4 billion in FY2018-19 to amounted Chart 2.22 of Rs2.0 billion in FY2017-18. disinvestments FY2013- account from the financing of the current shows FY2018-19. through 14 Income Accounts Primary and Secondary 2012-13 2011-12 Services 2010-11 2009-10 Goods 2008-09 2007-08 2006-07 5 0 -5 15 10 -10 -15 -20 -25 Per cent of GDP Chart 2.21: Components of the Current Account Account Components of the Current Chart 2.21: Net inflows on the capital and financial account have been have and financial account on the capital inflows Net higher than the billion in FY2018-19, at Rs31.9 estimated Inclusive in FY2017-18. recorded inflows billion net Rs19.8 account is investment the direct of GBLHs’ transactions, billion of Rs141.3 inflows net registered have to estimated in Rs588.4 billion recorded to compared in FY2018-19 by non- investment Non-GBLHs’ year. fiscal the previous Rs13.4 reached of repatriation, in Mauritius, net residents the was sector estate’ the ‘real years, billion. As in recent direct transactions, GBLHs’ Excluding major recipient. estimated was of repatriation, net abroad, investment The portfolio investment at Rs2.9 billion in FY2018-19. Capital and Financial Account Total imports (c.i.f) soared by Rs17.7 billion, from Rs182.6 Rs182.6 billion, from Rs17.7 by imports (c.i.f) soared Total Rs200.3 billion in FY2018-19, to billion in FY2017-18 to related higher importsextent to a large reflecting products. petroleum and refined projects infrastructure per of 15.5 an increase by This rise is mainly explained products” fuels, lubricants and related cent in “Mineral per cent in “Machinery & of 12.3 coupled with an increase and cent per 19.3 transportrepresented which equipment” The current account deficit is estimated to have to have is estimated account deficit The current on account of the widening in FY2018-19, deteriorated the on borrowing net the However, deficit. account goods reservewas more assets, of inclusive financial account, account current finance the estimated to than adequate have to is account deficit estimated deficit. The current billion Rs28.0 to in FY2017-18 billion Rs21.4 widened from account the current GDP, to a ratio As FY2018-19. in to 5.7 per cent 4.6 per cent risen from have would deficit account deficit deteriorated that period. The goods over 20.2 per cent of billion (or Rs94.9 billion, from Rs12.8 by per cent of billion (or 21.9 Rs107.7 to GDP) in FY2017-18 GDP) in FY2018-19. EXTERNAL OF AND BALANCE TRADE PAYMENTS 13.0 12.0 11.0 10.0 9.0 8.0 7.0 6.0 5.0 2019Q2 Months of import 2019Q1 2018Q4 2018Q3 (R.H.S) Import Cover 2018Q2 2018Q1 2017Q4 Gross Official International Reserves 2017Q3 2017Q2 2017Q1 0 50 Rs billion 300 250 200 150 100 EXTERNAL VULNERABILITIES INDICATORS reserves international Higher exports of goods and gross the to debt contributed external gross as a lower as well of the Mauritian vulnerabilities easing of the external debt of external The gross during FY2018-19. economy per cent billion (or 17.3 the country Rs81.1 declined from billion (or 15.7 Rs77.0 to 2018 at end-June of GDP) as of gross The ratio per cent of GDP) as at end-June 2019. exports of goods and services debt to edged external 43.5 per from per cent as at end-June 2019, 41.1 to down reserves official of gross level while the earlier, cent a year external of gross times the stock than three more were servicing debt exports of to external of debt. The ratio goods and services per cent in FY2017- 5.9 declined from per cent in FY2018-19. 4.2 to 18 Chart Reserves International Official 2.23: Gross and Import Cover -10 -15 -20 -25 -30 -5 0 Rs billion 2018-19 Reserve assets Current account balance (RHS) 2017-18 2016-17 Financial Derivatives Other Investment 2015-16 2014-15 Direct Investment Portfolio Investment 2013-14 0 Rs billion Gross Official International Reserves Official International Gross Reserves (GOIR) of the Official International The Gross assets foreign gross principally the comprising country, position in the IMF, of the Bank of Mauritius and reserve at as billion Rs230.5 billion, from Rs22.9 by increased 2019 Rs253.4 billion as at end-June to end-June 2018 from (Chart the GOIR increased 2.23). In US dollar terms, USD7,161.4 to 2018 USD6,668.5 million as at end-June of Based on the value million as at end-June 2019. services the imports for non-factor of goods (f.o.b.) and the GOIR of the country represented 2018, calendar year compared months of imports as at end-June 2019 11.8 of level The high 2018. months as at end-June 10.8 to external buffer against potential adequate GOIR provides headwinds. The ‘other investment’ account, inclusive of GBLHs’ account, inclusive investment’ The ‘other of inflows net recorded have to is estimated transactions, billion Rs409.9 to compared billion in FY2018-19 Rs194.6 in withdrawals the pick-up mainly by driven in FY2017-18, consisting mostly sectors‘, ‘other by held abroad of assets registered sector government of GBLHs. The general to net of Rs4.0 billion compared outflows higher net of Rs2.2 billion in FY2017-18. outflows Chart Account of the Current 2.22: Financing 500 -500 1,500 1,000 -1,000 -1,500

Review of the Economy 56 Review of the Economy

57

Jun-19 Jun-19 Jun-19

Mar-19 Mar-19 Mar-19

Dec-18 Dec-18 Dec-18

Sep-18 Sep-18 Sep-18

Jun-18 Jun-18 Jun-18

Mar-18 Mar-18 Mar-18

Dec-17 Dec-17 Dec-17

Sep-17 Sep-17 Sep-17

Jun-17 Jun-17 Jun-17

Mar-17 Mar-17 Mar-17

Dec-16 Dec-16 Dec-16

Sep-16 Sep-16 Sep-16

Jun-16 Jun-16 Jun-16

Reserve as a share of Gross Extrernal Debt

Mar-16 Mar-16 Mar-16

Reserve as a share of Broad Money Liabilities (BML) Reserve as a share of imports of goods and services share of imports of goods Reserve as a Dec-15 Dec-15 Dec-15

Sep-15 Sep-15 Sep-15

Jun-15 Jun-15 Jun-15 Per cent Per cent Per cent

95.0 90.0 85.0 80.0 75.0 70.0 65.0 60.0 55.0 46.0 44.0 42.0 40.0 38.0 36.0 34.0 32.0 30.0

100.0 340.0 310.0 280.0 250.0 220.0 190.0 160.0

Jun-19 Jun-19

Jun-19

Mar-19 Mar-19

Mar-19

Dec-18 Dec-18

Dec-18

Sep-18 Sep-18

Sep-18

Jun-18 Jun-18 Jun-18

Mar-18 Mar-18 Mar-18

Dec-17 Dec-17 Dec-17

Sep-17 Sep-17 Sep-17

Jun-17 Jun-17 Jun-17

Mar-17 Mar-17 Mar-17

Dec-16 Dec-16 Dec-16

Sep-16 Sep-16 Sep-16

exports of goods and services

of Export of goods and services

Jun-16 Jun-16 External Debt Service as a share Gross External Debt as a share of Jun-16

Gross External Debt as a share of GDP Gross External

Mar-16 Mar-16 Mar-16

Dec-15 Dec-15 Dec-15

Sep-15 Sep-15 Sep-15

Jun-15 Jun-15 Jun-15 Per cent 2.0 4.0 6.0 8.0 22.0 21.0 20.0 19.0 18.0 17.0 16.0 15.0 40.0 42.0 44.0 46.0 48.0 10.0 3.1 2.5 2.0 3.4 5.3 4.0 3.6 9.4 6.5 3.9 2.5 14.7 31.9 25.8 36.2 Share (%) Share (%) Share 2018-19 2018-19 87 70 55 96 111 410 719 149 100 169 431 262 262 2,114 2,398 6,627 2,790 Amount (Rs million) Amount (Rs million) 1.7 2.3 2.6 3.0 2.5 2.5 5.9 3.6 5.4 2.4 2.2 11.9 20.9 28.4 23.7 Share (%) Share (%) Share countries for inward workers’ remittances accounted for for accounted remittances workers’ inward for countries in FY2018-19 remittances inward cent of the total 73.8 per a 2.2). As (Table cent in FY2017-18 per 74.7 to compared per at 0.6 stood remittances inward GDP, to percentage per cent in FY2017-18. 0.5 to compared FY2018-19 cent for target 10.c, that is, to reduce to less than 3 per cent the to reduce that is, to 10.c, target eliminate and remittances migrant costsof transaction with costs than 5 per cent by higher corridors remittance 2030. and Rs2,114 million (or 31.9 per cent of total), respectively. respectively. per cent of total), million (or 31.9 and Rs2,114 sector in the manufacturing employed workers Foreign 2.3 Table in FY2018-19. transfers the largest effected for outward destination countries five the top shows remittances. 2017-18 2017-18 46 64 72 83 69 70 101 143 159 165 332 583 359 1,571 1,880 2,123 5,330 Amount (Rs million) Amount (Rs million) Belgium Australia United Arab Emirates Arab United Outward remittances Outward

USA Italy Canada Switzerland Bangladesh India United Kingdom United Inward remittances Inward Ireland France France Madagascar China The overall charge for inward and outward remittances remittances outward and inward for charge overall The per cent and 0.8 per cent, 0.07 averaged in FY2018-19 per cent, 0.05 per cent and 1.0 to compared respectively, compliant Mauritius remains in FY2017-18. respectively Goals, Nations Sustainable Development with the United Outward workers’ remittances summed to Rs6,627 million million Rs6,627 to summed remittances workers’ Outward Rs5,330 million in FY2017-18. to compared in FY2018-19 were remittances outward Some 75 per cent of the total and the Asian continent, with Bangladesh to directed million (or 36.2 per cent of total) Rs2,398 India, receiving Table 2.3: Outward Workers’ Remittances, Top 5 Destination Countries Remittances, Top Workers’ 2.3: Outward Table Table 2.2: Inward Workers’ Remittances, Top 10 Source Countries Source 10 Remittances, Top Workers’ Inward 2.2: Table Workers’ Remittances Workers’ been have in FY2018-19 remittances workers’ Inward million Rs2,123 to million, compared at Rs2,790 estimated source ten per cent. The top 31.4 higher by in FY2017-18,

Review of the Economy 58 Review of the Economy 59 7 rounds of negotiations. 7 rounds Export 200 some for market Mauritian products Includes investment, economic cooperation and services in force came into Agreement 2019. May have African countries 54 and signed the agreement ratified countries have it. 27 • • • • • CECPA with India AFCFTA African Market Comprehensive Economic Cooperation and Economic Cooperation Comprehensive – India Partnership (CECPA) Agreement the Comprehensive on round of negotiations first The and Partnership Agreement Economic Cooperation rounds seven with startedIndia with 2017, in (CECPA) four covers The agreement held till date. of negotiations services,in trade goods, in trade namely trade, of aspects The trade and economic cooperation. investment in in stages, with trade will be implemented agreement phase. CECPA in the first be initiated to likely goods more some 200 for market the Indian access to will provide rhum, products, textile Mauritians goods, such as sugar, The among others. and jewellery, medical equipment near future. be signed in the to is expected agreement deficit with India. a significant trade Mauritius also runs COMESA, the country benefits from preferential access to access COMESA, the country preferential from benefits within intra-trade although market African Sub-Saharan the the exception with limited, poles has been these trading with Trade and Madagascar. with South Africa of trade China and India has such as economies major emerging are countries these as uneven but significant more been of imports than export markets. rather primarily a source deficit with trade a large run Mauritius has traditionally Mauritius imported about Rs34 China. In FY2018-19, Rs1.3 about China, but exported billion of goods from exports, mainly of fish billion of goods which consisted to is likely feeds. The FTA copper and animal refined second largest the world’s to support exports growth exports base. the euro-centric and diversify economy FTA with China Africa Strategy Mauritius by of Rs500 million Fund Government. in Special economic zones Senegal and D’ivoire, Cote Madagascar. FTA signed on 17 October October signed on 17 FTA 2019. Export 8,000 over for market quota Mauritian products, for special for 50,000 tonnes sugar. • • • • Free Trade Agreement – China – Agreement Trade Free with (FTA) Agreement Trade Mauritius has signed a Free which FTA first the Beijing, in 2019 October 17 on China China has signed with a country of the African continent. the country a huge market will give access to The FTA US$13 some of GDP a with inhabitants, billion 1.4 of duty free from benefit to Mauritius enable and trillion products, 8,227 some on market Chinese the on access 96 per cent of the Chinese tariff lines. These representing frozen as rhum, such export items include key products fruits, and biscuits, fresh wafers fish, noodles and pasta, and articles watches linen, garments, water, juices, mineral in such as trade chapters, 17 covers The FTA of leather. investment, goods and services, property, intellectual policy, competition e-commerce, economic cooperation, exportan consistsof also agreement The others. among Mauritian sugar for of special of 50,000 tonnes quota on which import dutysugar producers, will be applicable per cent a maximum of 15 to progressively and increased in services, trade Mauritius As regards the eighth year. by services various access to will have service providers including financial services,telecommunications, sector, services, and health construction professional ICT, services. Regional Integration Initiatives Regional Integration and its bilateral strengthen has continued to Mauritius the trade and open economy, As a small networks. regional the and development, growth for key channel remains endowments so that the country factor more has limited and As a member of SADC size. and a small market GOVERNMENT FINANCE GOVERNMENT 2.9 per cent of GDP from deficit increased The budget and was 3.2 per cent in FY2018-19, to in FY2017-18 government Total domestic sources. wholly financed from to in FY2017-18 billion Rs105.8 from increased revenue 4.6 per cent compared or by FY2018-19 billion in Rs110.7 which revenue, Tax per cent in FY2017-18. 12.5 to revenue, per cent of recurrent 91 nearly for accounted fiscal the over billion Rs98.9 to billion Rs91.5 from rose 8.7 to compared cent per 8.1 by or 2019, June ended year fell buoyancy The tax (Chart 2.24). per cent in FY2017-18 on income, Taxes in FY2018-19. 1.5 to FY2017-18 1.6 from 13.9 per cent, from by rose gains and capital profits, compared Rs26.6 billion in FY2018-19, Rs23.3 billion to on Taxes per cent in FY2017-18. of 7.1 rate a growth to about 60.0 per goods and services, for which accounted Rs63.1 6.3 per cent to by rose revenue, of recurrent cent contributions remained Social billion in FY2018-19. which in FY2018-19, billion almost unchanged at Rs1.3 a decline of 2.3 per cent in into translates nonetheless per cent in FY2017-18. of 2.1 a fall to compared FY2018-19 per cent in FY2018-19 31.5 by dropped revenue Capital from cent in transfer per 81.4 of decline the account of on Rs0.9 Rs4.8 billion to from funds which decreased special partlywas that 61.5 of a rise offset by billion in FY2018-19 Rs4.2 billion to which increased grants per cent in external during the period under review. market, especially for small and medium-sized enterprises enterprises medium-sized and small for especially market, Village and Cote The Senegal Cargo that end, (SMEs). To and a special up, set been have Park Technology d’Ivoire Madagascar Industrial the in Madagascar, zone economic committed has Government in the pipeline. Zone, is over million in the Fund an amount of Rs500 invest to Mauritian large extent, To some years. a period of five such in Africa in sectors invested already have companies as financial services companies), (banks and insurance (sugar) and tourism. agriculture textiles, has been countries and COMESA with SADC Trade partners Main trading in these blocs limited. somewhat In FY2018- Madagascar and Kenya. included South Africa, South billion of goods from Mauritius imported Rs17.2 19, billion worth of goods, mainly Rs7.5 Africa and exported ran Mauritius year, the financial Over textiles. comprising The country and Madagascar. with Kenya surplus a trade and Madagascar in Kenya from billion both imported Rs1.5 and Rs4.6 Kenya Rs2.2 billion to but exported FY2018-19, mainly consisted Exports Kenya to Madagascar. billion to Madagascar exports while to electronics, of sugar and instant noodles, consisting of textiles, diverse, more were and medicine, amongst articles of plastics, electronics almost 80 for and Madagascar accounted Kenya others. Mauritius, while exports COMESA from per cent of total 90 per nearly Madagascar and South Africa constituted exports. SADC cent of total Mauritius aims to position itself as a platform for trade trade for position itself as a platform Mauritius aims to the Mauritius in Africa. In this respect, and investment up was set 2012, in Budget introduced first Africa Fund, in Africa. Key invest to domestic enterprises encourage to establish a clear strategy to were of the Fund objectives steer Africa; to into investments Mauritian promoting for including Special projects; of integrated the development assist African countries; to Economic Zones in selected and partnership agreements joint ventures in developing to establish and and Mauritian firms; African between the African to enter for companies financing instruments Mauritius Africa Strategy (MAF) Mauritius Africa Strategy African Continental Free Trade Area (AfCFTA) Area Trade African Continental Free create to African countries decided In December 2010, tariffs eliminating on quotas by and a continent-wide FTA respective and services.goods by endorsed was This UnionAfrican the at Governments and State of Heads signed the Agreement Mauritius Summit in January 2012. along with 44 2018, in March establishing the AfCFTA three consistsof agreement The countries. African in goods, services namely on trade and rules protocols, While of disputes. the settlement for and procedures modalities since 2015, been ongoing have negotiations with 90 and services in goods been agreed, on trade have be eliminated. to per cent of tariff lines on goods expected main priority in services five on sectors, will focus Trade tourism and namely financial, transport, communication, on 30 May force came into The AfCFTA business sectors. create (i) to are AfCFTA the of objectives main The 2019. goods and services, for with market a single continental investments; and persons business of movement free and (iii) enhance Africa’s intra-Africa trade; (ii) expand and supportcompetitiveness economic transformation. its including Mauritius, 54 African Member States, To-date, 27 by ratified which was signed the AfCFTA, have has come into while the Agreement countries. However, rules finalisation of of the in terms still remains work force, in goods and trade both access for of origin and market of African offers access services.in trade market final The as the as well in goods trade for Union Member States to the Schedule of Specific Commitments will be submitted January 2020 Session of Assembly of the African Union. the African continent (excluding exports to In FY2018-19, a quarter of total around for Island) accounted Reunion South exports to mainly by exports, albeit dominated of exports to The share Africa, Madagascar and Kenya. further expand with the AfCFTA. to Africa is expected In FY2018-19, Mauritius imported Rs37.8 billion worth of Mauritius imported Rs37.8 In FY2018-19, cent pertained 80 per to of which over India, goods from Rs1 billion just below but exported products, petroleum vanilla, mainly of consisted India, which to of goods a lesser extent.African and jewellerymedical equipment to (AfCFTA) Area Trade Free Continental

Review of the Economy 60 Review of the Economy 61 Compensation of Employees Use of Goods and Services Interest Subsidies Grants Social Benefits Other Expense Contingencies Acquisition assets of non-financial Other transfers Bodies Parastatal to Grants 1% 8% 10% 24% 18% 7% 3% 25% 2% 2% The budget deficit has been estimated at Rs16.9 billion at Rs16.9 deficit has been estimated The budget from unchanged of GDP, or 3.2 per cent in FY2019-20 to deficit is estimated budget The recurrent FY2018-19. capital However, GDP. to per cent as a share 1.3 decline to to widen to projected is GDP to ratio a as deficit budget from increasing expenditure capital per cent, with 1.9 billion in FY2019- Rs17.0 to billion in FY2018-19 Rs13.3 of on acquisition higher expenditure 20, mainly due to to projected deficit is The budget non-financial assets. the while domestic sources, be financed mainly through remain unchanged at 0.6 to primary deficit is estimated of GDP. per cent as a share Debt Public Sector Rs298.1 per cent, from 7.6 by debt increased Public sector Rs320.7 billion as at end- to billion as at end-June 2018 a build-up in public enterprises’ reflecting June 2019, debt rose public sector GDP, to domestic debt. As a share 64.6 per cent as to 63.4 per cent as at end-June 2018 from domestic debt increased Public sector at end-June 2019. billion as at end-June Rs240.8 per cent, from 11.2 by representing billion as at end-June 2019, Rs267.7 to 2018 public sector However, GDP. to a share 53.9 per cent as billion Rs57.3 per cent, from 7.6 debt declined by external Rs53.0 billion as at end-June 2019. to as at end-June 2018 to GDP dropped to debt as a ratio external Public sector per cent as at end-June 2018. 12.2 per cent, from 10.7 19.6 by increased Debt obligations of public enterprises Public Rs35.6 billion as at end-June 2019. per cent to almost 35 per cent by domestic debt rose enterprises and non-guaranteed guaranteed Rs22.9 billion. Both to the year. over domesticincreased debt enterprises public 0.5 debt declined by external public enterprises However, Budgetary FY2019-20 for Estimates Chart 2.25: Components of Government’s Total Chart Total 2.25: Components of Government’s in FY2018-19 Expenditure Source: Ministry of Finance and Economic Development. MinistrySource: Development. of Finance and Economic Taxes Social Contribution Other Revenue Grants External from Transfer Special Funds 89% 1% 4% 5% 1% Chart 2.24: Sources of Government’s Total Revenue Revenue Total of Government’s Sources Chart 2.24: in FY2018-19 Budget Balance and Financing Balance and Financing Budget a deficit of Rs13.5 from balance deteriorated The budget mainly FY2018-19, in billion Rs15.9 to FY2017-18 in billion deficit budget The recurrent revenue. capital lower due to billion Rs7.6 to Rs6.2 billion in FY2017-18 widened from The expenditure. recurrent higher reflecting in FY2018-19, to lower was higher at Rs8.2 billion, due deficit capital expenditure capital which exceeded revenue capital to share a as deficit budget The FY2018-19. during 2.9 per cent to compared at 3.2 per cent, GDP stood from exclusively was financed The deficit in FY2017-18. primary The domestic sources. is computed deficit, which deficit, the budget from payments deducting interest by 0.5 per cent in to compared at 0.6 per cent of GDP stood FY2017-18. Total government expenditure rose by 6.0 per cent from per cent from 6.0 by rose expenditure government Total billion in FY2018- Rs126.5 to billion in FY2017-18 Rs119.4 Rs104.6 from also increased expenditure Recurrent 19. or by billion in FY2018-19, Rs113.2 to FY2017-18 billion in cent in the in FY2017-18. 5.0 per to compared 8.3 per cent and grants social benefits of employees, Compensation expenditure, of recurrent the major components were cent of per about 74.7 for accounted which together (Chart of 2.25). Compensation expenditure recurrent billion or about 6.2 per Rs31.4 to amounted employees billion at Rs32.0 while social benefits stood cent of GDP, expenditure Capital GDP in FY2018-19. or 6.4 per cent of to FY2017-18 billion in Rs14.8 per cent from 10 by fell of 5.5 per growth A lower billion in FY2018-19. Rs13.3 of non-financial assets in acquisition registered cent was Implementation cent in FY2017-18. 25.6 per to compared about 73 per cent of the was projects of capital rate about 64 per to compared amount FY2018-19 estimated cent in FY2017-18. Source: Ministry of Finance and Economic Development. MinistrySource: of Finance and Economic Development.

56.0 54.0 52.0 50.0 48.0 46.0 44.0 42.0

Jun-19

Mar-19

Dec-18

Sep-18 Jun-18

Rs/GBP (RHS)

Mar-18 Dec-17

Rs/EUR

Sep-17 Jun-17

Rs/USD Mar-17

Dec-16

Sep-16 Jun-16 Overall, the strength of the US dollar on international of the US dollar on international the strength Overall, of 4.1 appreciation respective with financial markets, Jones and Dow per cent and 2.9 per cent of the DXY Upbeat on the rupee. weighed in FY2018-19, Dollar Index US economic including robust releases, economic data coupled conditions, market labour activity and favourable boosted confidence in the US economy, investor with strong dovish more by capped gains were although the US dollar, with tensions ongoing trade and the US Fed stance by Canada, the including Mexico, countries, China and other hand, the rupee On the other Union and Turkey. European of amid underperformance against the euro strengthened and idiosyncratic lingering political tensions the Eurozone, member countries, which number of Eurozone in a factors in inflation weak Further, on the euro. adversely impacted Central the European bloc compelling the single currency monetary dovish policy stance also a more adopt Bank to gained vis- the rupee In parallel, on the euro. a toll took which is still of under the spell sterling à-vis the Pound governing terms uncertainty the intensified surrounding Union. the European of the UK from the exit MERI1 and by measured as terms, In nominal effective of the of the strength the brunt bore MERI2, the rupee by partners of major trading and depreciated currencies 100.331 from per cent, respectively, per cent and 1.2 1.4 in June and 100.649 101.707 to and 99.445 in June 2018 depreciated average, on MERI1, FY2018-19, In 2019. of 2.2 0.2 per cent as against appreciation by marginally flat MERI2, on its part, remained per cent in FY2017-18. an appreciation following during the period under review, year. financial per cent in the preceding of 1.9 and on weights based on trade terms, effective In real and June June 2018 basis between a point-to-point per cent 0.1 by marginally appreciated the rupee 2019, basis, average On an annual 102.095. to 102.246 from as 0.9 per cent in FY2018-19 by depreciated the rupee mostly of 4.7 per cent in FY2017-18, against appreciation Chart Rate 2.26: Nominal Exchange 42.0 40.0 38.0 36.0 34.0 32.0 30.0 28.0 During FY2018-19, the rupee fluctuated within a narrow a narrow within fluctuated rupee the During FY2018-19, posting a monthly average against the US dollar, range end to trend a depreciating and maintaining of Rs34.591, rupee of the at Rs35.589. Movements year the financial The within a tight range. also remained against the euro a reach to against the euro initially strengthened rupee lost but subsequently in February 2019 high of Rs38.910 In tandem 2019. June in at Rs40.269 settle to ground on international sterling of the Pound with the weakness uncertainties, Brexit-related arising mainly from markets during sterling vis-à-vis the Pound appreciated the rupee of Rs43.698 in a low from and fluctuated FY2018-19 2019. a high of Rs45.860 in March to December 2018 EXCHANGE RATE DEVELOPMENTS RATE EXCHANGE evolved rate exchange the rupee During FY2018-19, on the international in line with developments broadly end-June 2018 basis, between On a point-to-point markets. dealt selling average the weighted and end-June 2019, cent against 2.7 per the by depreciated the rupee of rate the In contrast, Rs35.768. Rs34.623 to US dollar from from 0.2 per cent against the euro by appreciated rupee the 0.9 per cent vis-à-vis Rs40.465 and by to Rs40.557 (Chart 2.26). Rs45.276 to Rs45.670 from sterling Pound by weakened basis, the rupee On an annual average as 2.5 per cent against the US dollar during FY2018-19 of 5.3 per cent in the preceding against an appreciation rupee strengthened other hand, the On the year. financial and per cent vis-à-vis the euro 2.0 per cent and 1.5 by under review during the year respectively, sterling, Pound per cent of 3.6 per cent and 0.6 as against depreciation in FY2017-18. per cent to Rs12.7 billion. Budgetary central Government Budgetary billion. Government central Rs12.7 to per cent most in the two concentrated debt remained external per cent) (41.9 euro currencies: reserve and largest liquid 2019. as at end-June per cent) dollar (31.8 and the US in Chinese Yuan denominated of debt share The relative points and 0.1 percentage 1.6 by fell and Japanese Yen ago. a year to compared respectively, point, percentage unchanged remained sterling in Pound Debt denominated in US dollar rose while those denominated the year over of debt carrying a point. The share percentage 0.5 by that with per cent while 57.0 was tag rate floating interest The debt servicewas at 42.3 per cent. rates interest fixed debt burden, a country’s of external indicator a key ratio, 5.5 per cent from per cent as at end-June 2019, 4.0 to fell at end-June 2018.

Review of the Economy 62 Review of the Economy 63

STOCK MARKET DEVELOPMENTS MARKET STOCK a on broadly remained market domesticstock The the mainly reflecting in FY2018-19, downtrend general transport, in the tourism, of operators underperformance The SEMDEX shed sectors. and sugar-linked real-estate to 2018 as at end-June 2,245 5.2 per cent, from around which comprises The SEM-10, end-June 2019. as at 2,128 by dropped on the Official Market, blue chip companies period. On an annual average the same 2.9 per cent over per cent 1.4 by fell and SEM-10 basis, the SEMDEX as against in FY2018-19 respectively, and 0.9 per cent, cent, respectively, per cent and 18.2 per of 18.4 increases (Chart 2.29). in FY2017-18 tourism in the companies listed prices of The share Island Resorts, namely Lux and New Sun Limited sector, per cent, 29.6 per cent and 18.9 by fell Mauritius Hotels, review, under period the during respectively, cent, per 31.4 companies performances. Sugar-linked of tepid as a result mainly reflecting during FY2018-19, underperformed also on international sugar prices prevailing of low the impact the write-off the financial sector, to With respect markets. led to of non-performing loans in a constituent company price of that company. a significant decline in the share at stood Market Official the on capitalisation market Total Rs269.0 to compared Rs252.7 billion as at end-June 2019 a decline of 6.1 representing billion as at end-June 2018, recorded of 6.0 per cent per cent as against an increase on the Official of transactions turnover Total in FY2017-18. billion in Rs13.6 cent to per 16.7 by dropped Market were shares million 526.1 terms, In volume FY2018-19. compared in FY2018-19 Market on the Official traded fall of a reflecting in FY2017-18, 698.6 million shares to 25 per cent. nearly accentuated on the Official Market disinvestment Foreign foreigners sales by Net during period under review. significantly Rs2.5 billion during FY2018-19, to amounted billion in FY2017- sales of Rs1.4 net to higher compared lower reflected non-residents sales by The higher net 18. Rs4.2 billion from fell which foreigners, by purchases in billion during FY2018-19, Rs4.1 to FY2017-18 during Rs5.6 billion to from higher sales which rose addition to the the same period. Notwithstanding Rs6.6 billion over on the SEM, holdings by listed in shares disinvestment Rs59.6 to cent per 0.2 by increased investors foreign Rs59.5 billion as at end- from billion as at end-June 2019, valuation changes that include the reflecting June 2018, as a percentage Measured of the US dollar. appreciation holdings investors’ foreign capitalisation, market of total per 17.9 from per cent as at end-June 2019, 19.2 to rose earlier. cent a year

Jun-19

Mar-19

Dec-18

Sep-18 USD EUR GBP ZAR JPY AUD OTHERS Jun-18

REER

Mar-18 Dec-17 MERI2

43.6%

Sep-17 Jun-17

21.4% MERI1 Mar-17

28.8% Dec-16

Sep-16 Jun-16 Index 99 98 97 96 95 94 93 92 91 90 101 100 Chart 2.28: Foreign Exchange Transactions by by Transactions Chart Exchange 2.28: Foreign by Dealers: Turnover Exchange Banks and Foreign Currency Total turnover on the domestic foreign exchange market market exchange on the domestic foreign turnover Total but dealt transactions, and forward (including spot of the interventions and transactions interbank excluding billion in of US$11.4 an equivalent from Bank) increased FY2018- billion in of US$12.5 an equivalent to FY2017-18 the US dollar and notably major currencies, The two 19. transactions of total two-third nearly made up for the euro, the US (Chart in both transactions 2.28). Nonetheless, transactions, of total shares as respective dollar and euro, 45.5 per cent and 23.3 per cent in FY2017- declined from per cent, in FY2018-19. 43.6 per cent and 21.4 to 18 Volatility in the rupee exchange rate against US the rate exchange in the rupee Volatility Rs/ the of deviation standard the by computed as dollar, in FY2018- 0.135 declined to rate, USD daily exchange to some reflecting, in FY2017-18, 0.196 to compared 19 volatility on international of the US dollar lower extent, period as the same 0.933 over to 1.764 from markets domestic the Bank on the foreign by as intervention well market. exchange MERI2 and REER MERI1, of Evolution Chart 2.27: reflecting a favourable inflation differential for Mauritius differential inflation favourable a reflecting partner trading illustrates Chart countries. to 2.27 relative and REER. MERI2 of MERI1, the evolution 1.9% 2.9% 0.5% 0.8% (June 2016= 100)

May-19

Mar-19

Jan-19

Nov-18

Sep-18

Jul-18

May-18

Mar-18

Jan-18

Nov-17

Sep-17 Total

Jul-17

May-17 (excluding GBCs)

Mar-17

Jan-17

Nov-16

Sep-16

Jul-16 May-16

Households

Mar-16

Jan-16 Nov-15

as a ratio to GDP went up to 70.5 per up to GDP went to as a ratio

Sep-15 4 Jul-15

. Household indebtedness continued . Household indebtedness

May-15 5 Mar-15

Corporates Jan-15

Nov-14

Sep-14

Jul-14

May-14 Mar-14 Per cent 8.0 6.0 4.0 2.0 0.0 -2.0 -4.0 cent as at end-June 2019, from 65 per cent as at end-June 65 per from cent as at end-June 2019, per cent 21.8 to rose ratio Household credit-to-GDP 2018. cent in June 2018, 20.3 per from as at end-June 2019, 44.9 per up from went ratio credit-to-GDP while corporate the same period. Household 48.3 per cent over cent to sector private cent of total per 31.1 for accounted credit 30.7 per cent in June up from 2019, as at end-June credit credit total in credit corporate of share the whereas 2018 69.3 per cent. 68.9 per cent, from declined to depends upon the household Household consumption and their preferences, savings, to returns income, wealth, bank June 2019, to the year economic conditions. Over per cent compared 10.9 by increased households to credit in increases supported by per cent in FY2017-18, 7.9 to households for to granted and credit housing credit both purposes other Note: Credit extended to corporates include Public Corporations. include Public Corporations. corporates to extended Credit Note: total availed, facilities in credit the increase Reflecting credit sector private to be positively influenced by the low interest rate rate interest low the by influenced positively be to to in addition period under review, during the environment apply their to free limit. Banks are the abolition of the LTV as an integral appetite limits based on their risk LTV own Whilst the management policy. risk part of their credit declined credit household in total of housing credit share 64.6 per cent in June to per cent in June 2018 67.4 from other households for by availed of credit the share 2019, 35.4 per cent over 32.6 per cent to up from went purposes facilities of higher credit this period, as households availed for Bank credit of motorcycles. the purchase destined to 4.0 per cent in FY2018-19 by grew housing purposes Households in 6.0 per cent in FY2017-18. to compared whereas corporate credit growth declined from 9.5 per from declined growth credit corporate whereas growth corporations, public per cent. Excluding 8.8 cent to as at end- per cent 11.2 to accelerated credit of corporate 2018. cent as at end-June 6.8 per up from June 2019, the to of Credit Growth Chart 2.30: Year-on-year Sector Private 14.0 12.0 10.0

450 430 410 390 370 350 330 310

Jun-19

Apr-19

Feb-19

Dec-18

Oct-18

Aug-18

Jun-18 Apr-18

SEM-10 (RHS)

Feb-18

Dec-17

Oct-17

Aug-17 Jun-17

SEMDEX Apr-17

Feb-17

Dec-16

Oct-16

Aug-16 Jun-16 As at end-June 2019, bank exposure to households and to bank exposure As at end-June 2019, the GBC to extended facilities excluding corporates, assets about 25 per cent of their total constituted sector, per cent 24 to per cent of GDP compared and about 71 at the end of June 2018. per cent, respectively, and 67 the abolition of the limit by backed was credit Demand for costshave Borrowing 2018. July in (LTV) Loan-to-Value on at an all-time Rate Repo with the Key contained remained businesses and Consumers 2017. September since low economic outlook. the to with regards optimistic remained (excluding sector the private to of bank credit Growth 9.5 per cent y-o-y to in June 2019, GBCs) accelerated higher by driven and was 8.0 per cent in June 2018 from households and corporates both by availed facilities credit has been primarily (Chart loan growth 2.30). The rapid which is an housing loan market active by underpinned a bank securing stable income at for product attractive from rose growth Household credit risk. low a relatively cent in June 2019, per 10.9 to per cent in June 2018 7.9 Bank exposure to households and corporates bears bears households and corporates to Bank exposure High financial stability. important for consideration on the economy. impact has detrimental indebtedness to respond and businesses households Highly-geared and consumption reducing by economic disturbances Households will typically curtailpostponing investments. their all non-compulsory and increase consumption resulting the to will respond while businesses savings in layoffs output, resulting reducing shortfall in demand by demand in lower can result These and redundancies. in of bankruptcy and induce higher risk bank credit for thereby the business cycle, to sensitive industries that are adequacy the capital loan losses, weakening leading to and lending capacity lending can of banks. Reduced demand. aggregate weaken DEBT INDICATORS OF HOUSEHOLDS AND DEBT INDICATORS CORPORATES Source: Stock Exchange of Mauritius. Exchange Stock Source: Chart and SEM-10 of the SEMDEX 2.29: Evolution 2,400 2,300 2,200 2,100 2,000 1,900 1,800 1,700

Review of the Economy 64 Review of the Economy 65

is an

6

Q2

8.00 7.71 7.43 7.14 6.86 6.57 6.29 6.00

2018Q4

Per cent Q1 2019

2018Q3

Q4 Q4

2018Q2 Q3 Q3

Q2 Q2

2018Q1 2018

Q1 Q1

2017Q4

Q4 Q4

2017Q3

Q3 Q3

2017Q2

Q2 Q2 Other purpose gap 2017

2017Q1

Q1 Q1

2016Q4 Q4 Q4

important tool under Basel III for activating countercyclical countercyclical activating important III for under Basel tool gap credit-to-GDP The dynamic provisioning. policies and to 2018 June of end the at cent per -0.1 from increased on took as households end-June 2019 0.9 per cent as at additional debt. of ratio the as servicedebt Household measured - ratio during up household debt service GDP – ticked cost to higher debt service reflecting review, the period under debt. The higher costhouseholds accumulated as the higher debt offset in nominal GDP was by increase in a slightly higher household service cost, which resulted at per cent as 6.5 at estimated service-to-GDPdebt ratio, 6.3 per cent as at end-June to compared end-June 2019 (Chart 2.31). 2018 operating activities after deducting for labour input costs, labour input activities after deducting for operating 2019, For with nominal GDP growth. corroborate appear to 5 per around flat at be rather to is estimated of GOS growth expansion in economic activity sustained cent, reflecting of investment. sources higher internal add to that would (Chart 2.32). While consistent with the evolution of credit of credit (Chart evolution with the 2.32). While consistent gap the credit-to-GDP households, to extended

2016Q3

Q3 Q3

2016Q2

Q2 Q2 Housing gap

2016

2016Q1 Q1 Q1

2015Q4 Q4

Q3

2015Q3

Q2 2015 2015Q2

Household gap

Q1

2015Q1

Q4

2014Q4

Q3

2014Q3

Q2

2014

2014Q2

Q1

2014Q1 Per cent 1.2 1.0 0.8 0.6 0.4 0.2 0.0 -0.2 -0.4 -0.6 -0.8 9 8 7 6 5 4 Per cent 11 10 Exclusive of facilities extended to the GBC sector. the GBC sector. to extended of facilities Exclusive vehicles, of motor of land, purchase goods, purchase consumer durable of other include purchase purposes other households for to extended Credit purposes. unspecified and other purposes investment medical purposes, education purposes, filter. using the Hodrick-Prescott of its trend and an estimate ratio the credit-to-GDP between deviation as the percentage gap is estimated The credit-to-GDP 4 5  6 Exposure of banks to domestic corporates accounted for for accounted domestic corporates of banks to Exposure and 17 credit sector private 69 per cent of total around Gross as at end-June 2019. assets per cent of their total be used as a proxy (GOS), which may Surplus Operating enterprises’ incorporated by added provided the value for Chart Gap 2.32: Household Credit-to-GDP Chart 2.31: Household Debt Service Rates Cost and Interest Chart 2.31: Indebtedness of households, as measured by the ratio of the ratio by households, as measured of Indebtedness cent per 21.8 to rose GDP, households to to bank credit end-June at as cent per 20.6 from 2019, end-June at as under check. Aggregating broadly and remained 2018, insurance banks, NBDTIs, from household credit of household the measure and leasing companies, per cent as at end-June 33.4 slightly to fell indebtedness The higher 34.0 per cent as at end-June 2018. from 2019, shifted the household ratio household credit-to-GDP 2018Q3 as from territory positive gap into credit-to-GDP Mauritius borrow mainly for housing purposes which which housing purposes mainly for borrow Mauritius borrowing household of total about two-third account for in are addition, most banks. In of their borrowing from risk exchange foreign As such, domesticcurrency. the to exposure currency foreign banks’ from arise may that households is mostly mitigated.

Q2 Q1

2019

Q4 Q4

Q3 Q3 Q2 Q2

2018

Q1 Q1

Q4 Q4

Q3 Q3 Q2 Q2

2017

Q1 Q1

Q4 Q4

Q3 Q3 Q2 Q2

2016

Q1

Q4

Q3 Q2

2015

Q1

Q4

Q3 Q2

2014 Q1 Per cent 3.0 2.0 1.0 0.0 -1.0 -2.0 -3.0 Note: Data on the sectorwise distribution of credit as from October 2018 is based on a new is based on a new 2018 October as from of credit on the sectorwise distribution Data Note: Classification Industrial Standard Nations International as per the United reporting template comparable. be strictly not (ISIC) of all economic activities and thus may years. This drop was not fully reflected in their share in in their share reflected fully not was drop This years. credit. sector private total banks to by extended credit in With the improvement credit-to- in Mauritius, the sector of the private operators in territory positive into and moved GDP gap has improved continued has gap credit-to-GDP sector Private 2018Q3. in at 3.0 per cent estimated was and in 2019H1 increase to higher gap points to higher credit-to-GDP The June 2019. up the building point to and may corporates leveraged corporates so, as some large the more of vulnerabilities, funds. raise to market the capital to had recourse have consistently gap has increased credit-to-GDP Corporate (Chart 2.33). in 2019Q2 quarters consecutive four for Gap Chart Credit-to-GDP 2.33: Corporate Domestic debt of corporates grew by 8.5 per cent as 8.5 per by grew Domestic debt of corporates operators to credit by driven and was at end-June 2018 including of the economy sectors in almost all key manufacturing trade, distributive tourism, construction, as financial and business services. as well With buoyant sector of the construction the share activity, construction has remained in credit but its share in GDP has increased sector the construction In 2019, or less unchanged. more while of GDP, 4.9 per cent account for to is estimated which facilities of credit availed in the sector operators credit sector private 6.0 per cent of total represented the accommodation As regard as at end-June 2019. the for though it still accounted serviceand food sector, as at end-June credit sector private in total highest share the past years, has dwindled over credit in its share 2019, by operators bank credit from deleveraging reflecting of tourism Nevertheless, sustained growth in the sector. sector the of share higher a in resulted has activities This per cent in 2019. at 7.1 in GDP which is estimated operators by of GDP represented with the share contrasts the which has declined over sector in the manufacturing Domestic debt of corporates accounted for nearly 92 per nearly for accounted Domestic debt of corporates and 50 as at end-June 2019 debt corporate cent of total per cent as at end-June 48.5 to GDP compared per cent of for accounted which corporates, debt of External 2018. as a debt, declined corporate cent of total 8.2 per around 3.5 to at end-June 2018 as 3.6 per cent from GDP, to ratio debt external flat The rather 2019. per cent as at end-June of in an improvement reflected was corporates of stock Reserves Official International Gross debt to the external 8.7 per cent to 9.6 per cent as at end-June 2018 from ratio, as a ratio debt of corporates External as at end-June 2019. to per cent 11.4 slightly from fell export proceeds total to per cent. 11.3

Review of the Economy 66 Review of the Economy 67 2020 FY2018-19 FY2018-19 2019 FY2017-18 FY2017-18 FY2016-17 FY2016-17 2018 FY2015-16 FY2015-16 2017 World Trade Growth FAO Food Price Index FY2014-15 FY2014-15 Global Economic Policy Uncertainty Index 2016 FY2013-14 FY2013-14 2015 FY2012-13 FY2012-13 0 50 Per cent 6.0 5.0 4.0 3.0 2.0 1.0 0.0 300 250 200 150 100 220 210 200 190 180 170 160 150 Index (2002-2004=100) 3.6 FY2018-19 FY2018-19 forecast 3.6 2020 3.6 FY2017-18 FY2017-18 Composite 3.2 2019 Inflation 2.8 FY2016-17 FY2016-17 NYMEX 2.8 2018 PMI FY2015-16 Services FY2015-16 3.5 2017 Global Economy forecast 3.2 ICE FY2014-15 FY2014-15 Crude Oil Prices, US$ per barrel 3.6 2016 3.8 GDP FY2013-14 FY2013-14 Manufacturing 3.4 2015 3.4 FY2012-13 FY2012-13 0 80 60 40 20 55 54 53 52 51 50 49 48 47 120 100 Sources: July 2019 IMF WEO Update, Reuters, http://www.policyuncertainty.com/ and FAO. and http://www.policyuncertainty.com/ Reuters, Update, IMF WEO July 2019 Sources: GLOBAL ECONOMIC DEVELOPMENTS ECONOMIC GLOBAL The US dollar appreciated against the main currencies, againstmain currencies, the appreciated US dollar The and robustgrowth US economy’s the both reflecting Tensions of monetary normalisation policy. progressive ascribable to in 2019Q1, markets in stock recorded were of monetary tightening conditions by rapid of a more fears dispute of trade Reserve and the exacerbation the Federal uncertainty the US and China. Heightened between to and prices in share fall a to led growth world about on high- premium in US risk increase a simultaneous economies, external In emerging bonds. yield corporate as they overall favourable became less financial conditions US monetary the by policy normalisation affected were of international aversion risk and the greater process investors. by driven softened during FY2018-19, Global growth advanced economic performance in both weaker momentum growth economies and EMDEs. The lower trade of the intensification extent, to a large reflected, on which weighed economies, major between tensions amid declining business confidence, spending investment demand. external and weak industrial production lower mostly economies mirrored in advanced growth Lower area, in the euro of economic conditions a deterioration business and consumer account of weaker on largely in Germany production automotive confidence, lower policy uncertainty emission regulations, new in due to amid France in spending consumption weak and Italy and effects on financial markets Brexit-related protests. performance economic dampen businesses continued to on of the economy a contraction in the UK, contributing to US economic growth In contrast, a q-o-q basis in 2019Q2. with a tight labour its momentum, associated maintained The US economy growth. and solid consumption market of rate unemployment low 50-year a nearly recorded of growth The IMF downgraded 3.6 per cent in 2019H1. 2.2 to 2018 July in cent per 2.4 from economies advanced 1.9 to cent per 2.2 from and 2018, for 2019 July in cent per 2019. per cent for weaknesses broad-based experienced EMDEs equally and exports. of The implementation in manufacturing additional tariffs the US on Chinese goods, combined by put the banking sector, in tightening with regulatory on economic activity in China, although pressure monetary and fiscal these effectscontained stimulus worsened Economic performance in Brazil somewhat. of uncertainty around against a background markedly In Russia, government. of the new process the reform in 2019 hike rate of a VAT as a result activity weakened The sharp oil production. to continued restrictions and with concerns together growth, in global trade deceleration down dragged have commodities, global demand for over the performance of commodity in emerging exporters of growth down economies. As such, the IMF marked per cent in 2019 and 5.1 4.9 per cent in 2018 EMDEs from per cent, respectively, 4.5 per cent and 4.1 to in July 2018 substantial experienced EMDEs Several 2019. July in Trends observed in the international financial markets financial markets observed in the international Trends the stance of regarding changing expectations mirrored outlook, and global economic growth monetary policy, Tensions turbulence. with bouts of severe tensions, most countries considered in some of the emerging fueled uncertainty and Turkey, e.g. Argentina vulnerable, in main advanced rates interest Long-term further. anticipation of a further in in September, economies rose but monetary Reserve’s policy rate, rise in the Federal of fears heightened to owing again thereafter fall began to stance and ensuing accommodative a global slowdown banks. among major central Economic activity in Emerging Market and Developing and Developing Economic activity Market in Emerging but the effects overall, Economies (EMDEs) decelerated demand and of the less of foreign of the deterioration countryto from financial conditions differed favourable continued its rebalancing The Chinese economy country. supply of services and a greater a greater towards household contribution of domestic demand, especially account surplus The current expenditure. and government virtually was balance of payments eliminated. of China’s On 14 November 2018, the EU and the UK came to an the EU and the UK came to 2018, November On 14 agreement withdrawal the concerning understanding their future regarding and the political declaration by approved subsequently were which relationship, Council. The and the European the British government the ratification rejected has repeatedly British Parliament a no- avert to and in order agreement of the withdrawal and requested twice the British government Brexit, deal of the Council an extension the European from obtained 31 October to 12 April and then to deadline, first 29 March has of a no-deal Brexit While postponed, the risk 2019. been averted. however, not, The global economy grew at a slower rate of 3.6 per cent rate slower at a grew The global economy short falling 2017, in cent per 3.8 to compared 2018 in performance. This reflected of a stronger of expectations of the economic situation, deterioration the progressive advanced in many economies and, then, in emerging first partlytemporary nature, factors, of a countries. Specific that hit Japan and the disasters such as the natural interacted industry area, stalling of the auto in the euro of uncertainty with the high degree at the global level, the US between tensions trade due to mainly which was and expenditure investment on toll a took This China. and sharply. which slowed trade, international During FY2018-19, developments on the global economic the global economic on developments During FY2018-19, the protectionist conditioned by heavily scene were liberalisation trade world over that prevailed pressures the from exit UK’s the of risk persistent the processes; in US Union an agreement; without increase European episodic bouts of which caused about rates interest volatility; assets of the riskiest in the prices a correction economies; volatility and in oil prices in advanced geopolitical strains.

Review of the Economy 68 Review of the Economy 69 FY2018-19 FY2017-18 FY2016-17 Consumer Confidence Index FY2015-16 FY2014-15 Business Confidence Index FY2013-14 FY2012-13 were reflected through political instability in some through reflected were in slowdown the noticeable over countries, and worries Uncertainty of major economies. economic growth about the UK and the between economic relationship the future in the Prime Minister the appointment of a new EU and of a hard-Brexit. fears UK, raised contained remained broadly Inflationary pressures global low rather thanks to globally in FY2018-19, oil of both commodity prices on the back of oversupply demand conditions. weak commodities and and food remained countries’ inflation outcomes Most advanced also were of EMDEs Inflation in a number target. below points in FY2017-18 to 1,190 index points in FY2018-19 as FY2018-19 points in index 1,190 to FY2017-18 points in capesize for rates in hire fall and tensions of trade a result iron such as commodities demand for China’s ships, as frictions trade Going forward, muted. was and coal ore on the index. weigh continue to would of indicators broad PMI, which are Global Composite lost on account momentum, economic activity, world global FY2018-19, During sector. of the manufacturing threshold, level the 50 PMI dipped below manufacturing into moved and 2012 since October reading its lowest and stagnated volumes as production territory contraction declined. Services into remaining PMI, while orders new slower the expansionary reflecting headed south, zone, Composite Total OECD’s of the services sector. growth an average declined from (CLI) steadily Leading Indicator of 99.5 in FY2018- an average to in FY2017-18 of 100.6 individual OECD mostlargest of the the CLI for as 19, G7 The loststeam. having growth to pointed economies The uncertain international CLI echoed a similar trend. of the face in that prevailed economic environment business and on both a toll took tensions lingering trade consumer confidence indices (Chart 2.34). 99.5 99.0 98.5 98.0 101.5 101.0 100.5 100.0 FY2018-19 FY2017-18 FY2016-17 G7 FY2015-16 FY2014-15 OECD Total FY2013-14 FY2012-13 Source: OECD. Source: during Global policy uncertainty elevated remained trade unresolved fueled by predominantly FY2018-19, to the the US and China, but also due conflict between amidst more process normalisation rate US interest monetary accommodative policy stances of major central and uncertainty Brexit surrounding banks; protracted Policy Economic Global The strains. rising geopolitical per cent, 74 by Uncertainty on average, soared, Index amid in FY2018-19, 263.4 to in FY2017-18 151.5 from to frictions that escalated US-China mounting trade Union and European countries, including Mexico other countries took targeted (EU) countries, and as a result, uncertainties heightened actions. In Europe, retaliatory Chart and Confidence Indices Leading Indicators Composite 2.34: financial market pressures in 2018H2, associated with associated in 2018H2, pressures market financial global of country tightening the vulnerabilities, specific sentiment volatile investor conditions and financial in 2019, reversed was trend This disputes. trade to linked on to EMDEs in portfolio flows with a recovery however, to due a certain to sentiment, and extent, market improved looser global financial conditions. the anticipation of and in 2018 considerably slowed growth trade World account on further 2019, in decelerate to expected is tariffthe increases like factors of combination a of imports; the the US and China on bilateral by introduced chains and global on the global value impact subsequent activity; global economic manufacturing and increased and Asia importuncertainty. demand in Europe Weak their given growth volume trade global dampened also decelerated growth trade Global trade. in world share As cent in 2018. 3.7 per to 5.5 per cent in 2017 from moderate, to major economies continues demand from EMDEs in across decelerate to is expected export growth face continue to would trade World the short near term. to is volume in trade and growth headwinds in 2019 strong ease further 2.5 per cent. The Baltic Dry to to projected index 1,270 about 6 per cent, from declined by Index 99.8 99.6 99.4 99.2 99.0 98.8 100.6 100.4 100.2 100.0 The Food and Agriculture Organisation (FAO) Food Price Food (FAO) Organisation and Agriculture The Food almost by pulled down during FY2018-19, declined Index The Index cereals. barring sub-components, all of its 166.8 to FY2017-18 in 174.3 from falling cent, per lost4 mostly prices was in food The downtrend in FY2018-19. production yields, which boosted of exceptional the result the importamid sluggish global demand. However, per cent in FY2018-19, 10 tumbled by Sugar Price Index world’s in India, the yields higher sugarcane reflecting a glut in the sugar bringing producer, sugar largest (IGC) Grains Council’s Grains The International market. Price Food in FAO’s the trend mirrored and Oilseed Index 193.3 to in FY2017-18 199.3 from and declined Index export supplies and expectations Large in FY2018-19. prices. on grains weighed production world of record (9 per in soyabeans registered The highest decline was ahead, the rice (5 per cent). Looking by cent), followed to subject remains markets performance of agricultural prices; the ongoing and fertilizer of energy the direction adverse and dollar US the of strengthening frictions; trade conditions. weather during FY2018- volatile increasingly were Equity markets by as the VIX increased pressure, and came under 19 in 16.8 to FY2017-18 in 13.4 almost from 25 per cent, policy over concerns heightened reflecting FY2018-19, growth and dampened disputes uncertainty, trade indices for Volatility economy. the world for prospects in sharply rose also Markets Emerging and Europe per cent, respectively, 11.8 6.3 per cent and by FY2018-19 and Markets The MSCI Emerging FY2017-18. to compared indices lostabout 9 per cent each Markets MSCI Frontier up marginally ticked MSCI World FY2017-18. to compared a two-tier reflected US markets about 1 per cent. The by sell-off at the end of performance, with a market diverse policy uncertaintyto partial due the US from arising 2018 on the back in 2019 and a rebound shutdown government Reserve. Federal the by stance dovish increasingly an of with trade in 2018H2, weaker were equities European issues Brexit economic growth, China’s slower tariffsfeud, triggering concerns budget the Italian over and worries in 2019 the main indices recovered However, investors. for amidst the announcement of sustained monetary policy in emerging banks. Equities major central stances by partially before in 2018H2, underperformed markets ongoing policy support the for over in 2019H1 recovering to decision US the over optimism and economy Chinese on Chinese goods. tariffsuspend hikes during FY2018- on average, US dollar appreciated, The as as well of the US economy on the back of strength 19 demand amid Safe-haven the Fed. stance by a hawkish also supported the US currency. tensions US-China trade concerns due to in 2019H1 capped, however, Gains were and more a partial of the US government shutdown over uncertainty rising reflecting the Fed, by stance dovish Jones the US economic outlook. The DXY and Dow over % % % 2020 2020 2020 2.0 4.7 3.6 % % % 2019 2019 2019 1.6 4.8 3.6 % % % 2018 2018 2018 4.8 2.0 3.6 The recovery in oil prices inspired the US to increase its increase the US to in oil prices inspired The recovery particularly become oil, to shale oil production, crude million barrels 12 with over producer largest the world’s revolutionised The shale oil production daily. produced market. the world and impacted sector, the US energy declined, following oil prices have 2018, Since October increases demand and production world weakening inventories and the US. Global Saudi Arabia in Russia, the previous for in line with the average levels to increased the slope of the year, At the end of the period. five-year and negative, turned contracts of futures structure term of and expectations market a glut in the spot indicated of the OPEC+ in prices. The renewal further decreases cuts startingin production new make to agreement the cuts in Canada and by compounded 2019, early in Venezuela oil production on crude the restrictions the US on account of the sanctions applied by and Iran in oil prices in the recovery to contributed government, the of rebalancing the and to year this of months early the and NYMEX WTI at ICE Brent stood prices for Oil market. FY2018- in average, on barrel, per US$60.9 and US$69.2 respectively, US$63.9 and US$58.6 per barrel, up from 19, of 8 per cent and 4 increases representing in FY2017-18, of US$50 a low to oil prices slumped crude per cent. Brent a peak of US$86 from at end-December 2018, per barrel oil prices Going forward, 2018. October in early per barrel levels. their current around hover to expected are contained, reflecting waning pass-through effectsof waning pass-through reflecting contained, in inflation expects IMF The depreciation. currency to cent in 2018 2.0 per from drop economies to advanced economic subdued global the due to in 2019, per cent 1.6 commodity weak outlook and inflation prices. In EMDEs, at 4.8 per cent in 2019 unchanged remain to is expected commodity for amid poor dynamics prices. Emerging Market and Developing Economies and Developing Market Emerging Advanced Economies Advanced Global Economy

Review of the Economy 70 Review of the Economy 71 2019 2018 United Kingdom 2017 Euro area 2016 2015 United States (RHS) 2014 Per cent 2.75 2.50 2.25 2.00 1.75 1.50 1.25 1.00 0.75 0.50 0.25 0.00 -0.25 -0.50 -0.75 Source: Central banks’ websites Central Source: after a careful assessment of domestic and international assessment of domestic and international after a careful well as the as economic and financial developments and inflation the domestic growth to balance of risks that monetary ensure to outlook. The MPC endeavoured supportive of sustained non- appropriately policy remains term. the medium over inflationary economic growth Chart 2.36: Main Policy Rates of Major Central Banks Banks Chart of Major Central Rates 2.36: Main Policy and left the door open to potential rate cuts (Chart 2.36). rate and left potential open to the door the growth also shifted its stance, reflecting The ECB left The ECB countries. European in major slowdown zero at unchanged rate operations main refinancing its purchase asset and ended its in FY2018-19 per cent its meeting At billion in December 2018. of €15 programme signaled ECB the of Council Governing the 2019, June in 2020H2. in policy rate in its a hike consider might it that by its Bank Rate (BoE) increased The Bank of England 0.75 per cent at its MPC meeting to point 0.25 percentage to the 2 per inflation sustainably return to 2018 in August uncertainties surrounding increasing Despite cent target. monetary the BoE judged that tighter policy could Brexit, The BoE target. to bring inflation back to be required at £435 billion. target purchase its asset maintained banks also loosened central markets Major emerging support to their monetary policy stance during FY2018-19 ReserveThe shiftedIndia of Bank monetaryits growth. into taking accommodative, to neutral policy stance from conditions and global economic account the deteriorating in the consumption and private in investment slowdown Australia of Brazil, banks The central domestic economy. their bolster to Zealand also cut the policy rate and New economies. The South African Reserve tightened Bank inflation target above tame to monetary policy in 2018H2 indicating that in 2019H1, tone dovish a more but adopted depend on economic data. decisions would future 12,425 12,250 12,075 11,900 11,725 11,550 11,375 11,200 FY2018-19 FY2017-18 DJXY (RHS) FY2016-17 DXY FY2015-16 FY2014-15 The Bank’s Monetary Policy Committee (MPC) met on (MPC) met Monetary Committee The Bank’s Policy unanimously and voted occasions during FY2018-19 four Rate Repo the Key keep to meetings regular at these four (KRR) unchanged at 3.50 per cent per annum. The MPC deemed that the monetary appropriate, policy stance was Source: Reuters Source: Monetary in Mauritius during FY2018-19 Policy Chart 2.35: Dollar Index Responding to slowing growth momentum and subdued growth slowing to Responding tilt a dovish adopted banks have inflation, major central US The of 2018. their cautious tone reversing in 2019H1, in December cycle continue its tightening to set was Fed However, 2019. in hikes rate two forecast and even 2018 a patient took the Fed unfolded, as economic events its monetary its July policy stance. At position towards the US meeting, Committee Open Market Federal 2019 per cent 2.00-2.25 to rate Funds the Federal lowered Fed Dollar Index appreciated by 4.1 per cent and 2.9 per cent and 2.9 per per 4.1 by appreciated Dollar Index FY2017-18 to compared in FY2018-19 cent, respectively, under during the year weakened (Chart 2.35). The euro economic the Eurozone to pessimism relating over review of the industrial contraction which included outlook, Italy between dispute and budget Germany in sector The amongst Commission, others. and the European Bank Central stance of the European accommodative traded The currency on the euro. also weighed (ECB) to compared FY2018-19 in US$1.141 of average an at depreciated Sterling The Pound in FY2017-18. US$1.193 uncertaintyongoing the by clouded FY2018-19, during away shy to investors which pushed Brexit surrounding further turbulence Political weakened the currency. from date of the Brexit although the extension the currency, The Pound lent some support the embattled currency. to in FY2018-19, of US$1.294 at an average traded Sterling in FY2017-18. US$1.347 to compared 98 96 94 92 90 88 86 100 February 2019 3.9% Growth: Inflation: 2.1% May 2019 2019 May 3.9% Growth: Inflation: 1.5% meeting). MPC Members noted the noted MPC Members meeting). st Growth: 4% Growth: Growth: 4% Growth: Inflation: 3% Inflation: 3% August 2018 November 2018 November continuous downgrade in global growth performance as in global growth continuous downgrade and monetary amplified tensions policy in major trade remained economies market and emerging advanced discussed on the Members cautiously accommodative. global inflation of low the prevalence for reasons various developments that domestic macroeconomic and noted albeit some sectoral mostly on track, had remained would in 2019 that growth challenges. The MPC evaluated had that price pressures viewed They be broad-based. remain on a would ease and that inflation continued to per 3.9 at grow to expected was GDP Real downtrend. at below was being projected cent, while headline inflation at about 2 per cent for and forecast 2019 per cent for 1.5 2020. for 2019 and Inflation Projections Real GDP Growth 2019 and 2020, due to the escalation of trade tensions, tensions, of trade the escalation to and 2020, due 2019 geopolitical and uncertainties with Brexit associated muted, remained Global inflationarytensions. pressures commodity subdued relatively a prices amid reflecting The MPC concurred economic activity. in global slowdown with the resilient, somewhat was that domestic growth sectors. specific in weaknesses some of exception Real GDP growth contained. were Inflationary pressures 3.9 per cent, reflecting to lowered was 2019 for projection global economic uncertaintythe current and downward our major outlook of some of the growth of revision partners.trading shocks, In the absence of major supply per cent in 2.1 at around forecast was headline inflation base effects contained and favourable reflecting 2019, cost pressures. place on took FY2018-19 for The last MPC meeting (51 2019 20 May Voting Voting pattern Unanimous Unanimous Unanimous Unanimous 3.50 3.50 3.50 3.50 annum) cent per Rate (per Rate Key Repo Key Decision Repo Rate on the Key on the Key Unchanged Unchanged Unchanged Unchanged meeting held on 20 August 2018, the MPC 2018, held on 20 August meeting MPC meeting held on 22 February 2019, MPC held on 22 February 2019, MPC meeting th th MPC meeting was held on 09 November 2018. 2018. held on 09 November was MPC meeting

th meeting Date of MPC Date 20 August 2018 20 August 9 November 2018 9 November 22 February 2019 17 May 2019 May 17 Decisions of the MPC on the Key Repo Rate Repo Rate the Key of the MPC on Decisions its 48 At The 49 noted that heightened uncertainty that heightened noted global had clouded of world and leading indicators economic prospects The since 2018Q2. economic activity had weakened hampering was the US and China between dispute trade the EU continued of the UK from The exit investment. slowing doubts while China’s by be surrounded to global growth. to risk a downside constituted economy of the opinion that the domestic economy The MPC was contributions of the supported performing well, by was budgetary services pro-growth sectors, and construction and spending household consumption robust measures, The projects. infrastructure on major expenditure capital trajectory. its downward maintained rate unemployment of adverse waning reflecting the subdued, was Inflation decline in prices of administered prices and food shocks to at about 4 per grow to projected GDP was Real products. headline for The forecast 2019. and 2018 both for cent to 4.2 per cent from down revised was for 2018 inflation at 3.0 per cent. estimated it was 2019, 3.5 per cent. For At the 50 At The MPC noted that global growth projections were were projections global growth that MPC noted The as global economic meeting 2018 its August since lowered was outlook uncertainty The global growth intensified. policies, Brexit in trade developments adverse to subject inflation and geopolitical issues. Globally, negotiations subdued. The MPC judged that global has remained difficult, as downside remain economic conditions would Members the outlook. MPC plague continued to risks was GDP growth that domestic real underscored contained by characterised in an environment appreciable evolving has been The economy inflationary pressures. Domestic inflationarywere mostly impulses as expected. remaining inflation measures with underlying contained, unchanged. The were projections growth GDP Real low. to down revised was headline inflation for forecast 2018 of muted the joint impact 3.2 per cent, mirroring around For on CPI inflation. demand-pull and cost-push factors left it was major unchanged at 3 per cent, barring 2019, supply shocks. Members viewed that global economic activity viewed Members and trade institutions had Major multilateral had been losing steam. for projections their global growth once again lowered

Review of the Economy 72 Statement From The Governor 3 Regulation and Supervision Gold Dinar

The Gold Dinar is an Islamic gold coin first issued by Arabs in the 7th century. The word dinar comes from the Latin denarius, which was a silver coin. The Arabs who named Mauritius “Dina Arobin”, a subtle reference to the dinars which have circulated across the Indian Ocean for several centuries. Regulation and Supervision 75 , 2 3 Branches of Branches foreign banks foreign banks 8 foreign-owned foreign-owned Subsidiaries of The banking landscape is relatively concentrated, with concentrated, relatively landscape is The banking of 40 per cent over accounting for banks largest the two and assets. deposits, advances total for shares market banks 15 facilities, banking traditional In addition to services cards payment such as credit card-based offered banking internet banks offered and 17 and debit cards mobile banking services provided Six banks facilities. including payment facilities to their customers. The salient their customers. to facilities including payment end-June as at in Mauritius the banking sector of features below. depicted are 2019 8,188 Persons employed in the employed Persons expatriates) (128 sector banks 9 Domestic-owned . 1 Mobile van Counters 9 1 Banks 20

Automated Teller Teller Automated Machines (ATMs)

443 172 Banks Physical branches in branches Physical Republic Mauritius of (including 5 in Rodrigues) GDP at market prices for fiscal year 2018-19. fiscal prices for GDP at market customers. one non-bank entity to mobile based facilities offered As at end-June 2019, 1 2 THE MAURITIAN BANKING SECTOR BANKING SECTOR THE MAURITIAN by banks. is dominated in Mauritius sector The financial Institutions (NBDTIs) Banks, Non-Bank Deposit-Taking Mauritius of Bank the by regulated are dealers cash and fall under the corporations financial other whereas of the Financial Services aegis regulatory Commission role in the a significant plays sector (FSC). The banking banks of assets total as at end-June 2019, and economy per cent of GDP about 279 for accounted be a Deposit will provide a deposit coverage of coverage deposit a provide be used mainly to compensate compensate be used mainly to will will contribute premium into this Fund. On the this Fund. into premium contribute will insured depositors as and when required. Banks and as and when required. depositors insured NBDTIs other hand, the Scheme the hand, other For the purpose of the Scheme, there of the Scheme, there the purpose For Insurance Fund which Fund Insurance Foreign Exchange Dealer Licence Dealer Exchange Foreign on 27 issued was Dealer Licence Exchange A Foreign to Co Ltd Exchange Foreign Post Mauritius to 2018 August services Mauritius. in transfer value solely money provide The National Risk Assessment (NRA) Exercise Report (MER) of Mauritius Evaluation The AML/CFT Mutual In an effort enhance to 2018. published in September was requirements, AML/CFT the country’s to compliance and a public during 2017 initiated was an NRA exercise the Ministry by disseminated was report of the NRA version in August of Financial Services and Good Governance vulnerabilities and the threats highlighted The report 2019. risk the overall and, additionally, sectors several across identified and assessed. The Bank was each sector for authorities for with other groups participated in working exercise. assessment this risk financial banks and ‘other that both revealed The findings the Bank’, by institutions supervised and regulated assigned an ML risk were and cash dealers, i.e.NBDTIs High”. of “Medium rating Scheme Mauritius Deposit Insurance Legislation has been A Mauritius Deposit Insurance the establishment for provide to in April 2019 enacted Scheme (“Scheme”). of the Mauritius Deposit Insurance insured protect to be shall the Scheme, of objects The the provision through banks and NBDTIs of depositors The deposits. insured of againstloss the insurance of stability the to of the financial Scheme shall also contribute system. 2019, Scheme Act Under the Mauritius Deposit Insurance the and managed by the Scheme will be administered Ltd (“MDIC”), a Corporation Mauritius Deposit Insurance under and registered that will be incorporated company Act. the Companies up to Rs300,000 per insured depositor per bank and per per bank and per depositor Rs300,000 per insured up to of around the full coverage for This limit will cater NBDTI. majority that is, the large of 90% of individual depositors, which is in line with will be fully covered small depositors scheme of protecting of a deposit insurance the objective small depositors. Cim Finance Ltd and Mauritian Eagle Leasing Company Cim Finance Ltd and Mauritian Eagle Leasing Company their Deposit of surrendering in the process are Limited Business Licence and ceased the business of Taking April and 19 April 2019 18 with effectdeposit taking from respectively. 2019, Cessation of Deposit Taking Business Activities Cessation of Deposit Taking Deutsche Bank (Mauritius) Ltd surrendered its banking Deutsche Bank (Mauritius) Ltd surrendered des Mascareignes Banque licence in December 2018. changed its name and a Banking Licence in the name Ltee the institution issued to of BCP Bank (Mauritius) Ltd was 2019. on 28 March Banking Landscape DEVELOPMENTS IN THE BANKING AND IN DEVELOPMENTS DURING FY2018-19 SECTORS NBDTI The Bank has the power to regulate and supervise ultimate regulate to The Bank has the power at having financial holding companies and intermediate least one subsidiary deposit taking as bank or non-bank institution within the group. Ensuring the stabilityEnsuring the financial soundness of and of the Bank of the mandates of Mauritius is one system 4(2) (b) of in Section and this is enshrined of Mauritius and All banks, NBDTIs 2004. of Mauritius Act the Bank and dealers exchange foreign comprising cash dealers purview under the regulatory of the money-changers fall also the AML/CFT supervisorBank. The Bank is of those supervisory out its AML/CFT institutions. The Bank carries supervisoryactivities within a which, as from framework, supervision prudential segregates 2018, September mainly around AML/CFT supervisionfrom and revolves this To examinations. on-site and off-site monitoring the up in AML/CFT Unit set has been end, a dedicated Supervision Department on AML/ solely which focuses CFT supervision, examinations on-site out and carries of AML/CFT issues of banks. The and off-site monitoring training AML/CFT to exposed in the unit are examiners an for and skills enhance their knowledge to programmes supervisioneffective of the institutions.

Regulation and Supervision 76 Regulation and Supervision 77 39 on 24 July 2014. IFRS 9 is applicable for annual periods annual for 9 is applicable IFRS July 2014. 39 on 24 Standard The new on or afterbeginning January 1 2018. the shortcomings were in IAS 39 which address aims to The crisis of 2007-2008. during the financial highlighted the to 9 relates IFRS by about brought main changes instruments, of financial measurement classification and of assessments principle-based on rely now which characteristics flow cash contractual business models and Of particularof the financial instruments. to the concern allowance loss recognize the need to was banking sector, which losses on those financial assets credit expected for at amortised cost. measured are non-bank the Bank has engaged with banks, 2016, Since with auditors institutions and their external deposit-taking of IFRS 9. A survey was the implementation to regard to requested banks were whereby in 2018 conducted of IFRS 9 as well on their implementation details provide capital and profitability their on 9 IFRS of impact the as that, while indicated received The responses adequacy. of base capital the on impact mild a be would there after capitalised still be adequately banks, all banks would been of IFRS 9. The Bank has also the implementation parties capacity for building of its engaging with external staff. and Measurement Impairment The Guideline on Credit with a view in June 2019 revised was Income Recognition the provisions to relevant, wherever references, providing to in risks the potential of IFRS 9. As a means of addressing to adhere to required modeling of banks, banks are ECL in order Further, to provisioning. floors minimum prudential used in determining of models assess the adequacy to a the Bank rolled IFRS 9, to related accounting provisions collect to 2019 on IFRS 9 in August requirement reporting banks and non-bank deposit-taking from information institutions. Stress testing exercises stress-testing out several The Bank has carried of a number of banks to assess the resilience to that banks indicated shocks. The results macroeconomic of withstand a range to buffers capital hold adequate quality in the of shocks including a deterioration severe and rates banks’ loan portfolio and changes in interest also passed a Liquidity All banks have rates. exchange that based on the assumption test, Ratio stress Coverage withdrawn. are GBC deposits the high-risk-high-impact The International Accounting Standards Board issued the Board Standards Accounting The International the IAS to as a replacement IFRS 9 Financial Instrument IFRS 9 The Bank is currently finalising the implementation implementation the finalising currently is Bank The 100 the series of a second and final of approach the concept Report, wherein of the BYF recommendations for an important will play role Fairly Customers of Treating the benefit of the public. The Banking Your Future (BYF) Report aims at achieving (BYF) Future The Banking Your focus with more relationship bank-customer a fairer banking inclusive and a more interests on customers’ recommendations of the 100 The implementation sector. After extensive started in the report contained in 2018. Association with the Mauritius Bankers consultations a first implement to and its member banks, instructions in December issued were series of recommendations 20 implement to instructed banks were Of note, 2018. Association the Mauritius Bankers and recommendations of a further the implementation 3 oversee to invited was out that the instructions is pointed It recommendations. more provide to banks had as objective issued to information more give and charges, on fees transparency and services the language and on products and simplify style of bank customers the benefit of bank documents for and the public at large. Banking Your Future Report Future Banking Your Since May 2019, the Bank has finalised its AML/CFT RBS 2019, Since May banks. for framework In 2018, the Bank initiated the implementation of a Risk of a Risk implementation the the Bank initiated In 2018, of assistance with the Based Supervision framework 2019, ended 30 June Bank. During the year the World out of the rolling made in the was progress considerable on the working is presently The Bank RBS framework. runs pilot conduct to and expects parameters risk control in 2020. Risk Based Supervision (RBS) Framework The Bank is currently working towards the towards working is currently The Bank of the MDIC. incorporate The Bank will operationalisation The MDIC capital. its share and subscribe to the MDIC is, however, at the Bank. It initially be located will also of will, after that the MDIC years some envisaged institution another by over be taken successful operations, Principles in line with the Core independence, complete for Systems. on Deposit Insurance 1 2 The Guideline for Institutions Conducting The Guideline for July in amended was Business Banking Islamic Islamic banking for it optional make to 2018 issued standards adopt institutions (IBIs) to Organisation Auditing and Accounting the by that Financial Institutions Islamic provided for of the provisions a breach lead to this does not issued guideline or any the Banking Act of to required the IBIs were Further, thereunder. in disclosures compliance include adequate financial statements. to the additional notes of Non- the Write-off Guideline for A new issued in November was Assets Performing the for framework out a broad It sets 2018. write-off Banks are of non-performing assets. in place a board- have to required accordingly that the write-off policy and ensure approved of prospects where write-off of exposures, in a timely bleak, is conducted are recovery for the maximum timeframe However, manner. corporate towards the full write-off of exposures (including mortgages) should not and retail The respectively. and 5 years, 7 years exceed in June revised subsequently guideline was non- application to its scope of extend to 2019 institutionsbank deposit taking with effect 1 July 2019. from POLICY GUIDELINES ISSUED IN FY2018-19 GUIDELINES ISSUED POLICY 4 3 The Guideline on Credit Impairment Impairment The Guideline on Credit was Recognition Income and Measurement guideline The revised in June 2019. revised 1 January as from 2020. The shall be effective asset to with regard requirements prudential and requirements classification, provisioning enhanced in line with were income recognition The and best practices. standards international references, guideline also provides revised the accounting standard to relevant, wherever IFRS 9 – Financial Instruments. With a view to having a closer monitoring of closer monitoring a having to With view a the liquidity position of banks, the Guideline in on Liquidity revised Management was Risk their LCR report banks to require to April 2019 monthly of a instead bi-monthly basis on a basis.

Regulation and Supervision 78 Regulation and Supervision 79 The Finance (Miscellaneous Provisions) Act 2019 Act Provisions) (Miscellaneous The Finance Section 46 – Official foreign reserves foreign Section 46 – Official Section 33 – Transparency Section 25 – Consultants and other persons engaged to performSection 25 – Consultants and other persons services engaged to Section 9 – Limitations on activities of Bank Section 6 – Powers of the Bank Section 6 – Powers Section 2 - Interpretation The composition of the official foreign reserves must be determined by the Board. The Board must also aim to must also aim The Board by the Board. reserves must be determined foreign of the official The composition of priority. in that order liquidity and return their security, achieve Section 46 of the Act has been repealed and replaced by a new section 46 which provides that the Bank shall Bank the that provides which 46 section new a by replaced and repealed been has Act the of 46 Section reserves consisting of Mauritius of all or any and manage, on a bestmaintain effortforeign official basis, the or bank balances, of currency in the form exchange gold, foreign out in that section, namely set of the assets in securities denominated Monetary the International Fund, Rights issued by holdings of Special Drawing assets and such other or sale and repurchase their purchase from and claims resulting currencies convertible approve. may as the Board currencies in convertible denominated (vi) Section 33 of the Act has been repealed and replaced by a new section 33 which mandates the Bank to the Bank to 33 which mandates section a new by and replaced has been repealed Section 33 of the Act open discussions and comments on its monetary and financial stability policies and publish at least promote reports must include a These on its monetary a report on financial stability. report policy and a twice a year, relation thereto, of price and financial stability as an assessment of the policies of the Bank in well as review report. period of the relevant during the reference followed (v) Section 25(1) of the Act has been amended to provide that notwithstanding the Equal Opportunities the Equal that notwithstanding the Act, provide has been amended to Section 25(1) of the Act person, or other consultant engage any determine, may and conditions as the Board on such terms Bank may, services such to the Bank as it thinks fit. to provide qualified suitably (iv) A technical amendment was brought to Section 9(1)(h) of the Act, by replacing Section 48(3) with Section 48(1) 48(3) with Section Section replacing by of the Act, 9(1)(h) Section to brought was amendment technical A cross-reference. which is the appropriate (iii) Section 6(1) of the Act has been amended in paragraph (ba) to clarify that the Bank of Mauritius (‘Bank’) shall clarify that the Bank (ba) to has been amended in paragraph Section 6(1) of the Act substituting (e)(ii) by and in paragraph markets derivative and exchange of foreign the development promote instruments”. markets “money with the words papers” “commercial the words (ii) The definitions of the terms “central government”, “consultant” and “Financial Services “Financial and “consultant” in used Commission” government”, “central terms the of definitions The added in Section 2 of the Act. been have Act, the Bank of Mauritius (i) Bank of Mauritius Act 2004 Act Bank of Mauritius The Finance (Miscellaneous Provisions) Act 2019, which has been gazetted on 25 July 2019 as Act No. 13 of No. 13 Act as 2019 July 25 on gazetted been has which 2019, Act Provisions) (Miscellaneous Finance The Banking Act and 2004 of Mauritius Act the Bank to out hereunder, set the amendments has brought 2019, 2019. on 25 July operation into come have deemed to are These amendments 2004. Section 47 – Special Reserve – Special Fund Section 47 issue instructions to Section 50 – Power Bureau Section 52 – Establishment Information of Credit RegistrySection 52A – Establishment KYC of Central banking licence grant to or refusal Section 7 – Grant of banking licence suspension and surrender – Revocation, Section 11 in cases of urgency – Procedure Section 17 The Board shall determine the investment policy regarding the management of the official foreign reserves of foreign of the official the management regarding policy the investment shall determine The Board experience, and with proven repute of international person, or other consultant, any appoint and may Mauritius reserves on its behalf. exchange foreign the official manage to (vii) of priority of the order for which provides subsection (5) a new by and replaced has been repealed Section 47(5) capital the amount paid as of increasing the purpose for namely, the Special Reserveuse of the funds in Fund, monetary for policy purposes of the Board, approval and with the circumstances exceptional of the Bank and, in adversely to likely this is not that debt obligations, provided external government of central repayment and for Act. Mauritius of its functions under the Bank of by the Bank affect discharge the efficient (viii) penalty breaches for administrative impose the Bank to allow amended to has been the Act Section 50(6)(a) of under the banking laws. imposed the Bank or requirement or guidelines issued by instructions of any (ix) become participants and access to of have to platforms crowdlending allow Section 52 has been amended to Bureau. Information the Mauritius Credit (7) as an online portal has also been defined in subsection platform’ or electronic ‘crowdlending The term and borrowers lenders prospective or issuance of funds between the offering,execution facilitate to platform the Financial Services licence issued by Commission. and which holds an appropriate (x) that the Bank alia, provide inter Section 52A to, been added to (1A) and (1B) have subsections new Two agencies, of the Financial Services or co-operation relevant and other Commission seek the collaboration may KYC the establishment of the Central Unit, for Unit or the Counterterrorism Intelligence than the Financial other and such collaboration extend agencies may The Financial ServicesRegistry. Commission and the relevant Registry. and efficient establishment of the the prompt the Bank for to determine may assistance as they 2004 Banking Act (i) subsidiaries of banks as well. its scope of application to extending been amended by has Section 7(3) of the Act the Bank abroad, a banking licence is the subsidiary an applicant for of a bank incorporated where Accordingly, bank. international is a reputable abroad alia, satisfy itself that the bank incorporated shall, inter (ii) power the Bank, the upon vests which thereto (6A) subsection new a adding by amended been has 11 Section condition or any of the Banking Act the provisions with comply to a bank which fails the licence of suspend to its banking licence. to attached of the banking licence. the suspension for be followed to subsection (6A) furtherThe new out the procedure sets (iii) a banking licence in cases of suspend to upon the Bank the power vest has also been amended to Section 17 thereunder. as specified urgency

Regulation and Supervision 80 Regulation and Supervision 81 Section 64 – Confidentiality – Section 64 Section 63 – Bank holidays Section 54A – Protection of whistleblowers – Protection Section 54A Section 48 – Disclosure of interest Section 48 – Disclosure Section 18 – Limitations and remuneration on management Section 18 Section 64(7A)(a) of the Act has been amended to enable a financial institution to disclose any information information to disclose any enable a financial institution has been amended to Section 64(7A)(a) of the Act any or to its head office or holding company of the financial institution or its customers, the affairs to relating be approved functions as may management of conducting such risk purpose the for person, designated other the Bank. by (viii) Section 63(3) has been amended to clarify that any obligation which is required to be fulfilled at a financial to which is required obligation clarify that any Section 63(3) has been amended to day. working due on the following fall to shall be deemed on a Saturday, institution and which falls (vii) The Bank is further proscribed from disclosing the identity of the whistleblower without the latter’s consent. In disclosing the identity without the latter’s of the whistleblower from The Bank is further proscribed shall who has made a disclosure act of victimization against who commits an a person person addition, any a fine and imprisonment. commit an offence which is punishable by A new section 54A has been added to the Banking Act, which offers protection from civil or criminal liability as from protection which offers the Banking Act, section 54A has been added to A new or agent of a financial institution who discloses employee senior officer, as disciplinarywell a director, action, to which constitutes in an act been involved have may of its customer the Bank, that the financial institution or any to laws. of the banking a breach (vi) A new subsection (3A) has also been added to section 48 to require every financial institution to implement to implement every financial institution require section 48 to subsection (3A) has also been added to A new any to in relation interest or indirect direct disclose any to their employees requiring policies and procedures with the financial institution. have or undertaking may matter which they Section 48(1) has been amended to require a director or senior officer of a financial institution to disclose in of a financial institution or senior officer a director require been amended to Section 48(1) has matter to any relation in interest or indirect direct of the financial institution, any of directors the board writing to institution. with the financial or undertaking have which he may (v) Furthermore, the new subsection (8B) provides that the director making the disclosure under subsection (8A) making the disclosure that the director provides subsection (8B) the new Furthermore, Act. 54A of the Banking under section to whistleblowers afforded protection similar shall benefit from A new subsection (8A) has been added to section 18 of the Banking Act to require directors, in the circumstances in the circumstances directors, require to Act of the Banking section 18 has been added to subsection (8A) A new institution in a financial or condition which affects transaction of any the Bank forthwith inform to out therein, set its well-being. (iv) 5.5 1,415 13.4 246.0 FY2018-19 Rs 5.5 11.2 1,338 167.5 FY2017-18 Rs (Per cent) (Per (Billion) Loans (Per cent) (Per (Per cent) (Per Liquidity on Equity Coverage Coverage Total Assets Total NPL to Total Total NPL to Ratio Post-tax Return Post-tax billion as at end-June 2019. Advances extended by the by extended Advances at end-June 2019. billion as billion Rs766.9 to cent per 9.2 by increased sector banking from increased profits Banks’ total as at end-June 2019. FY2018- for Rs20.0 billion to billion in FY2017-18 Rs17.2 income. Non-performing interest net a rise in reflecting 19, at 5.5 loans stood outstanding total to loans as a ratio end-June unchanged from 2019, per cent as at end-June 2018. 20 1.7 74.4 19.2 FY2018-19 21 1.5 17.2 69.8 FY2017-18 Capital (Per cent) (Per (Per cent) (Per (Per cent) (Per Number of Banks Loans-to- on Assets on Assets deposit Ratio Pre-tax Return Pre-tax Adequacy Ratio Key Highlights Key Total deposits of the banking sector increased by 2.5 per by increased sector deposits of the banking Total Rs1,030 to 2018 billion as at end-June Rs1,005 cent, from PERFORMANCE OF THE BANKING SECTOR SECTOR OF THE BANKING PERFORMANCE cent, from 5.7 per by of banks increased assets Total billion Rs1,415 to 2018 billion as at end-June Rs1,338 cent per 4.9 a rise of to compared 2019 end-June at as guarantees Acceptances, during FY2017-18. recorded partand documentary of off-balance which are credits, billion as Rs105.4 4.8 per cent to by grew assets, sheet to the compared significantly lower at end-June 2019, year. in the preceding per cent of 43.1 growth

Regulation and Supervision 82 Regulation and Supervision 83 1.65 1.60 1.55 1.50 1.45 1.40 1.35 75 60 45 30 15 0 120 Return on 2018-19 2018-19 Assets (R.H.S.) 100 (RHS) 80 Coverage ratioCoverage 2017-18 2017-18 income Net interest Net interest 60 2016-17 2016-17 40 to Capital to income Net non-interest Net non-interest NPL net of provisions NPL net of provisions 2015-16 2015-16 20 Non-performing cent) Loans (Per 0

Provisions 2014-15 2014-15 Decomposition of Income (Per cent of Assets) Decomposition of Income (Per NPL to total loans total NPL to Holders Agriculture, Agriculture, Households Construction Manufacturing Other Financial 2013-14 2013-14 service activities and motorcycles Bank Loans to the Private Sector as at end-June 2019 (Rs Bn) as at end-June 2019 Sector the Private Bank Loans to Financial GBC1s) forestry and fishing - 5 0 Operating Cost 15 10 25 20 1.0 3.0 2.0 (1.0) (3.0) (2.0) Corporations (excluding Corporations (excluding Global Business Licence Accommodation and food Accommodation and food Wholesale and retail trade; and repair of motor vehicles vehicles of motor and repair 20 18 16 14 12 10 8 100 80 60 40 20 0 -20 -40 (RHS) 2018-19 2018-19 2018-19 Tier 1 Capital Ratio Banking Sector Indicators Sector Banking 2017-18 2017-18 Annual growth in Annual growth loans and advances 2017-18 (RHS) Return on Equity 2016-17 2016-17 deposits 2016-17 Annual growth in Annual growth 2015-16 2015-16 CET 1 Capital Ratio 2015-16 Loan and Deposit Growth (Per cent) (Per Loan and Deposit Growth Liquid Assets to Total Assets (Per cent) (Per Assets Total Liquid to Assets 2014-15 2014-15 ratio (R.H.S.) Loan to deposit Loan to Capital Adequacy Ratios and Return on Equity cent) (Per 2014-15 2013-14 2013-14 Ratio (CAR) Capital Adequacy 0 8 4 5 0 0 -5 12 16 24 15 10 10 20 25 20 20 30 40 50 -10 Domestic-owned Subsidiaries of foreign-owned Branches of foreign-owned % 62 billion, Rs482.1 billion and Rs49.2 billion, respectively, as billion, respectively, billion and Rs49.2 billion, Rs482.1 banking in total shares respective Their 2019. at end-June Chart in shown 3.1. are assets per 12.9 by billion. Tier rose 1 capital Rs151.1 per cent to 92.4 per cent of billion, which represented Rs139.6 cent to Rs11.5 to cent per 16.1 by Tiercapital. rose capital 2 gross 7.6 representing its share with billion as at end-June 2019 capital. per cent of gross ratio adequacy capital the risk-weighted shows 3.1 Table end- through 2018 end-June banks from by maintained base capital of the with components together June 2019, risk-weighted The rise in the assets. and risk-weighted per 19.2 per cent to 17.2 from ratio adequacy capital base the capital the period is primarily due to cent over a to per cent relative of 13.1 rate at a higher increasing per cent observed in the risk-weighted of 1.4 growth assets. % 4 Jun - 19 % 34 % 58 % 3 Jun - 18 % 39 The Bank has implemented the Basel III capital standards standards III capital the Basel The Bank has implemented since July 2014. in Mauritius in a phased approach required banks are January as from 2019, Accordingly, capital weighted at all times, a minimum risk maintain, to conservation (including capital buffer) ratio adequacy to end-June 2018 per cent. During the period of 11.875 of (net base capital aggregate banks’ end-June 2019, 13.1 by deductions) increased and capital adjustment Capital Adequacy Domestic systemically-important banks (D-SIBs) are enhanced supervision line with the Bank in to subject by and supervisory this categorythe regulatory for framework their banks maintained period, five of banks. In the review the conclusion of the yearly status as D-SIBs, following for accounted the D-SIBs 2019, end-June assessment. At banks’ assets, total Rs938.6 billion or 66.3 per cent of banks’ deposits billion or 68.8 per cent of total Rs709.1 banks’ loans. per cent of and Rs483.6 billion or 63.1 Of the twenty banks, nine were domestic-owned banks, domestic-owned Of the twenty nine were banks, were and three subsidiaries foreign-owned eight were of Rs883.8 banks holding assets of foreign branches Chart 3.1: Assets of Banks Assets Chart 3.1:

Regulation and Supervision 84 Regulation and Supervision 85 3 4 5 9 12 58 58 Rs billion 140 658 151 719 134 787 17.0% Jun-19 19.2% 4 5 5 11 57 10 59 135 650 710 146 130 779 16.6% Mar-19 18.7% 3 3 4 7 11 59 58 131 643 126 142 770 705 16.3% Dec-18 18.4% 3 4 8 10 61 12 57 126 644 120 136 777 708 15.4% 17.5% Sep-18 3 4 8 10 66 12 55 124 640 118 134 776 709 15.2% 17.2% Jun-18** Total on-balance sheet assets of banks increased by 4.2 by of banks increased assets on-balance sheet Total to billion as at end-June 2018 Rs1,279 per cent, from The corresponding at end-June 2019. billion as Rs1,332 by expanded assets sheet on-balance risk-weighted total Table the same period. billion over Rs787 per cent to 1.4 on- and off-balance assets the total sheet 3.3 compares and values risk-weighted of banks with corresponding as at end-June 2018 weighting combined risk average combined risk-weighted The average and end-June 2019. cent as at end-June 2018 per 47.5 from decreased ratio of a on account 44.8 per cent as at end-June 2019 to assets weight risk per cent in total of 1.4 growth marginal on and off- cent in total per of 7.5 an expansion to relative assets. balance sheet As at end of period As at end CET1 capital* Tier 1 capital Tier 2 capital Capital Base (A) Total Risk-Weighted Assets (B) Assets Risk-Weighted Total Total Risk-Weighted Assets for credit risk credit (C) for Assets Risk-Weighted Total Total on-balance sheet risk-weighted credit exposures credit risk-weighted on-balance sheet Total Total non-market-related off-balance sheet risk-weighted credit credit off-balance risk-weighted sheet non-market-related Total exposures Total market-related off-balance sheet risk-weighted credit exposures credit off-balance risk-weighted sheet market-related Total Total risk-weighted assets for operational risk (D) operational for assets risk-weighted Total Total Risk-Weighted Assets for market risk (E) market for Assets Risk-Weighted Total Total foreign currency exposures currency foreign Total Capital charge for trading book position exceeding 5% or more of its of its 5% or more book position exceeding trading for charge Capital assets total Capital Adequacy Ratio (A/B) CET 1 RATIO In terms of the risk profile of on-balance sheet assets, assets, sheet of on-balance profile of the risk In terms in the shares in the respective recorded was an increase per cent and 150 0 per cent, 35 per cent, 75 per cent, for while the proportion buckets 250 per cent risk-weight per per cent and 125 the 20 per cent, 50 per cent, 100 end-June between declined has buckets risk-weight cent the total 3.2 compares Table and end-June 2019. 2018 risk- corresponding of banks with assets on-balance sheet and end-June 2019. as at end-June 2018 weights Risk Profile of On - and Off-BalanceRisk Profile Assets Sheet * CET1 - Common Equity Tier1 figures ** Restated Table 3.1: Risk-Weighted Capital Adequacy Ratio Risk-Weighted 3.1: Table 1.5 1.5 0.0 0.3 2.5 8.4 4.9 14.6 36.1 30.1 787 426 100.0 1,332 1,758 44.8% (Per cent) (Per End-June 2019 assets balance sheet Percentage to total on- total to Percentage Jun-19 0 4 21 20 34 65 112 194 401 482 776 356 1,279 1,635 47.5% 1,332 (Rs billion) End-June 2018* On-balance sheet assets assets sheet On-balance The advances-to-deposits ratio, which indicates the extent the extent which indicates ratio, The advances-to-deposits been of deposits have way which funds mobilised by to 69.8 from finance lending activities, increased utilised to the same period. per cent over 74.4 per cent to Deposits of funding of the principal source Deposits remained of deposits in total The share banks during FY2018-19. end-June as at cent per 75.1 from down went liabilities deposits Total 72.8 per cent as at end-June 2019. to 2018 end- at as billion Rs1,030 to cent per 2.5 by increased June 2019. deposits total deposits to currency of foreign The share to per cent as at end-June 2018 61.1 slightly from dropped and Demand, savings 59.5 per cent as at end-June 2019. per cent, 41.7 for accounted time deposits, respectively, deposits as at end- per cent of total 29.3 per cent and 27.3 and per cent 46.5 per cent, 24.8 to compared June 2019, 28.7 per cent as at end-June 2018. 1.1 1.8 0.0 0.1 2.4 9.3 4.4 27.4 15.3 38.1 100.0 (Per cent) (Per assets balance sheet Percentage to total on- total to Percentage Jun-18* 0 1 14 23 30 56 351 120 196 487 1,279 (Rs billion) On-balance sheet assets sheet On-balance Total On-Balance Sheet Assets (Rs billion) Assets On-Balance Sheet Total Total Off-Balance (Rs billion) Assets Sheet Total (Rs billion) Assets Risk-Weighted Total Total On and Off-Balance + B) (Rs billion) (A Assets Sheet Total Average Combined Risk Weighting (D/C) (Per cent) (D/C) (Per Weighting Combined Risk Average 0 75 50 35 20 125 150 100 250 1250 A E B D C Risk Weights (%) Risk Weights Loans and overdrafts in Mauritian rupees amounted to to amounted in Mauritian rupees Loans and overdrafts while advances, Rs255.8 billion, or 33.4 per cent of total residents to currencies foreign financing in loans and other total of per cent or 16.3 billion, Rs125.0 to amounted financing Loans and other at end-June 2019. advances at Rs254.5 stood non-residents to currencies in foreign The advances. 33.2 per cent of total billion, representing bills of local and foreign consisted facilities remaining other and bills receivable and discounted, purchased securities. fixed-dated Total advances, including debentures and fixed-dated and fixed-dated including debentures advances, Total billion Rs766.9 9.2 per cent to by securities, increased a rise of 5.4 per cent in the to compared in FY2018-19, advances total 2019, As at end-June year. previous per cent and 54.2 per cent of total 74.4 nearly represented 69.8 to compared respectively, assets, total deposits and per cent and 52.5 per cent as at end-June 2018. *Restated figures *Restated Advances Table 3.3: Combined Risk Weights of Banks’ Assets 3.3: Combined Risk Weights Table *Restated figures *Restated SupervisionSource: Department. Table 3.2: Risk Weights of On-Balance Sheet Assets On-Balance Sheet of 3.2: Risk Weights Table

Regulation and Supervision 86 Regulation and Supervision 87 With the emergence of new types of economic activities, the return on sectorwise types of new of economic activities, the return the emergence With based on template a new by has been replaced sector the private to of credit distribution economic all of (ISIC) Classification Industrial Standard Nations International United the banks in the by provided Bank loans include only facilities 2018. October activities as from strictly comparable not are and finance leases. Hence, the data of loans, overdrafts form 2018. October with those prior to 3  Asset QualityAsset to linked banks is intrinsically soundness of The financial in liquidity and quality reflected their asset is generally and quality Poor asset can jeopardize of a bank. profitability a bank. the soundness of out of non- the carving assets Prior to out of distressed non- of gross one bank, the ratio for performing advances per 6.5 at stood advances total to performingadvances and post the carving out exercise, 2018 cent as at end-June and 2018 5.5 per cent as at end-June to improved the ratio non- The gross unchanged at end-June 2019. remained 5.9 per cent, by of banks increased performing advances Rs40.4 billion to billion as at end-June 2018 Rs37.7 from non-performing advances The gross as at end-June 2019. per cent to 21.1 by in Mauritius fell extended on facilities non-performing advances gross billion. However, Rs15.3 per cent to 37.1 by outside Mauritius increased extended during the period under review. billion Rs25.1 on non-performing advances provisions Banks’ specific Rs22.5 billion as at end- 3.9 per cent, from by decreased Specific billion as at end-June 2019. Rs21.7 to June 2018 in Mauritius held on non-performing advances provisions per cent while specific billion or 13.7 Rs1.2 by decreased outside Mauritius on non-performing advances provisions of specific cent. The ratio Rs0.4 billion or 2.6 per by rose as the known also non-performing advances, to provisions 59.7 per cent at end-June from dropped ratio coverage 53.6 per cent as at end-June 2019. to 2018 Profitability aftertax in profit in Mauritius realised All banks operating banks which incurred of five with the exception FY2018-19, pre- costs. Aggregate high operating losses mainly due to in FY2017- billion Rs20.1 from of banks increased profit tax mainly on account of a Rs23.8 billion in FY2018-19, to 18 3.4 shows income. Table per cent in interest rise of 15.7 sector of the banking income statements the consolidated financial audited based on the years the past three for ended March, years the financial of banks for statements June and December. Jun-19 Global Business Licence Holders Households Mar-19 ‘Wholesale and retail retail and ‘Wholesale

3 Other Financial Corporations (excluding Financial GBC1s) Manufacturing Wholesale and retail trade; and repair of motor vehicles and motorcycles ‘Agriculture, forestry and fishing’, and forestry ‘Agriculture, Dec-18 Oct-18 Construction Accommodation and food service activities Agriculture, forestry and fishing 0 Rs billion 900 800 700 600 500 400 300 200 100 Chart Other Non-financial 3.2: Bank Loans to Households and Other Sectors Corporations, trade; and repair of motor vehicles and motorcycles‘ and motorcycles‘ and vehicles motor of repair and trade; service and food ‘Accommodation activities’ declined 6.7 per cent 4.3 per cent, 6.4 per cent, 5.6 per cent, from 3.7 per to 2018 end-October per cent as at and 10.8 per cent and 10.2 cent, 5.8 per cent, 4.8 per cent, 6.5 per Chart 3.2 shows respectively. cent as at end-June 2019, 2018 October from bank loans outstanding sector-wise June 2019. through , ‘Construction’ ‘Manufacturing’, The share of loans to to loans of share The During the period October 2018 to June 2019, bank June 2019, to 2018 During the period October Households Non-financial Corporations, other loans to Business Global (including to and Other Sectors loans of share The cent. per 2.6 by increased Companies) (excluding ‘Households’, ‘Other Financial Corporations to 28.3 per from rose Financial GBC1s)’ and ‘GBC sector’ end-October at as cent per 16.3 and cent per 10.5 cent, per cent as per cent and 17.6 per cent, 11.6 29.1 to 2018 respectively. at end-June 2019, Bank Loans to Other Non-financial Corporations, Other Non-financial Corporations, Bank Loans to Households and Other Sectors Credit concentration risk, which represents one of the one represents which risk, concentration Credit the risk to in Mauritius, refers banks by faced major risks particular to overexposure bank’s a from of loss arising of groups different and/or of the economy sectors exposures large counterparties. Non-exempt connected per 10 above that is, exposures in the banking sector, billion, Rs412 Tier aggregated 1 capital, cent of a bank’s based fund and non-fund total of per cent 47 representing The aggregated as at end-June 2019. extended facilities per 294.9 represented borrowers to exposures large 2019 end-June at Tieras the banks of of cent capital 1 per cent of the Tier as at end- 1 capital 281.7 to compared June 2018. Concentration of Risks Concentration 1,100 1,000 7.1 1.8 1.8 6.2 5.0 3.2 2.4 4.7 2.6 9.9 5.4 3.8 10.1 10.1 10.5 10.5 35.2 14.8 14.8 14.4 14.4 34.8 34.8 49.6 49.2 20.0 29.2 23.8 20.0 2018-19 (Rs billion) 2.1 2.1 1.2 1.2 1.6 1.6 8.6 4.7 9.5 6.6 4.0 2.9 9.3 9.2 4.6 3.0 28.4 17.2 17.2 13.1 13.1 20.1 20.1 13.4 13.4 18.5 18.5 24.7 24.7 42.9 29.7 43.2 2017-18** 7.9 7.9 9.1 9.1 2.1 2.1 1.3 1.3 3.9 0.5 6.3 3.9 3.8 8.6 8.3 4.9 2.8 27.6 27.6 27.5 27.5 41.5 41.5 14.0 14.0 12.5 12.5 16.9 16.9 16.9 16.9 19.7 19.7 24.6 24.6 40.0 2016-17** Interest income Interest Rs49.6 per cent to 15.7 by income increased Interest advances, from earned Interest billion in FY2018-19. income, rose interest per cent of total 71.0 representing earned Rs35.2 billion. Interest reach per cent to 24.1 by Rs6.2 billion, per cent to 28.1 by down on securities went and loans to placements from received interest while Rs8.2 billion to income increased interest banks and other in FY2018-19. income Non-interest Rs14.4 per cent to 7.3 up by income went Non-interest fee- under review, During the year billion in FY2018-19. 8.2 per cent, while profit by income improved related by increased currencies dealings in foreign arising from billion in FY2018-19, mainly on account of improvement mainly on account of improvement billion in FY2018-19, Chart income component. the 3.3 shows in the interest income of banks from of total in components movements FY2018-19. through FY2016-17

Other Income Foreign Exchange (Profit from Dealings in 2018-19 Rs million & Commission Net Fee Income

2017-18* 'Interest on Placements & Loans to banks 2016-17* Interest on Securities

Advances Interest on

Interest on Advances Interest Interest on Securities Interest Interest on Placements and Loans to banks and Loans to on Placements Interest Other Interest Income Other Interest Interest on Deposits Interest Interest on Borrowings from banks from on Borrowings Interest Other Interest Expenses Other Interest Net Fee Income and Commission Income Fee Net Profit from Dealings in Foreign Currencies Foreign Dealings in from Profit Other Non-Interest Income Other Non-Interest Staff Costs Operating Expenses Operating Provision and Adjustments to Income from Credit Losses Credit Income from to and Adjustments Provision Provision for Income Taxes for Provision 5.0 0.0 Rs billion 40.0 35.0 30.0 25.0 20.0 15.0 10.0 Interest Income Interest Financial Year* Financial Interest Expense Interest Net Interest Income Net Interest Income Non-Interest Operating Income Operating Non-Interest Expense Non-Interest Operating Profit before Provisions Provisions before Profit Operating Profit before Tax before Profit Profit after Tax afterProfit *Restated figures *Restated Chart 3.3: Components of Banks of Income Total income of banks increased by Rs7.7 billion, or by billion, or by Rs7.7 by income of banks increased Total Rs64.0 to Rs56.3 billion in FY2017-18 from per cent, 13.7 Components of income *12 months period for which the accounts were audited and are different for different banks. different for different and are audited the accounts were which months period for *12 figures **Restated rounding. due to totals add up to not may Figures Note: Table 3.4: Consolidated Income Statements Income of Banks 3.4: Consolidated Table

Regulation and Supervision 88 Regulation and Supervision 89 18 16 14 12 10 8 3.8 3.7 3.6 3.5 3.4 3.3 3.2 3.1 3.0 2.9 Per cent Per cent 2018-19

2018-19 2017-18* Interest Rate Spread (RHS) Return on Equity (RHS) 2016-17* Cost per 2017-18* Rs100 of Deposits 2015-16

Return on Average Assets 2014-15

Interest Earned on Rs100 of Advances 2016-17* 2013-14

Per cent Per cent 1.7 1.6 1.5 1.2 1.4 1.3 *Restated figures *Restated *Restated figures *Restated Spread Rate Interest increased of advances on Rs100 earned Banks’ interest the cost In contrast, Rs4.73 in FY2018-19. 34 cents to by 2 cents to slightly by down of deposits went per Rs100 Rs3.69, to increased the spread Consequently, Rs1.04. Chart the 3.6 shows year. in the previous Rs3.37 from FY2018-19. through FY2016-17 for spread rate interest of Banks Chart Spread Rate 3.6: Interest cent in FY2018-19. It ranged between negative 2.0 per 2.0 negative between ranged It FY2018-19. in cent Three individual banks. cent for 2.2 per positive cent and 2.0 of above assets on average a return banks achieved per cent. the on equity for return hand, post-tax On the other per 13.4 per cent to 11.2 from increased banking sector increase higher of a account mainly on FY2018-19, in cent It in equity. decrease to the relation in profit in post-tax per 22.1 positive per cent to 16.7 negative from ranged individual banks. Chart cent for 3.5 depicts the return FY2013-14 equityand assets from banks of average on FY2018-19. through Chart and Equity Assets on Average 3.5: Return of Banks 4.5 3.5 2.5 1.5 0.5 5.0 4.0 3.0 2.0 1.0 0.0 Others

Expenses Operating 2018-19

Staff Costs 2017-18* Interest on Borrowings

2016-17* Deposits Interest on

0 Rs billion 8.0 6.0 4.0 2.0 12.0 10.0 The pre-tax return on average assets for the banking the for assets average on return pre-tax The per 1.7 to per cent in FY2017-18 1.5 from increased sector Return on Average Assets and Equity Assets Return on Average Banks’ operating profit before provision for credit losses losses credit for provision before profit Banks’ operating Rs29.2 to billion in FY2017-18 Rs24.7 from increased increased post profits tax Likewise, billion in FY2018-19. period. the same Rs20.0 billion over billion to Rs17.2 from Operating Profit Profit Operating Non-interest expense, which comprises staff which comprises expense, costs and Non-interest cent to 8.4 per by increased expenses, operating other of increase an to due mainly FY2018-19 in billion Rs20.0 and a 6.3 per cent expenses per cent in operating 10.5 the for ratio cost-to-income the staffin rise costs.Overall, 39.0 per cent in FY2018-19 to improved banking sector 43.2 per cent in FY2017-18. to compared Non-interest Expense Non-interest Total interest expense rose from Rs13.1 billion in FY2017- Rs13.1 from rose expense interest Total mainly on account of a in FY2018-19, billion Rs14.8 to 18 16.9 and expenses interest in other per cent increase 18.2 banks. from on borrowings in interest per cent increase Interest Expense Interest *Restated figures *Restated Chart 3.4: Components of Expense of Banks Total expenses of banks increased by 10.2 per cent to per cent to 10.2 by increased of banks expenses Total a rise in by mainly driven FY2018-19, Rs34.8 billion in Chartexpenses. 3.4 and operating on deposits interest of of expense of the components the evolution shows FY2018-19. through FY2016-17 banks from Components of Expense 18.3 per cent. Together, they accounted for 82.2 per cent 82.2 for accounted they per cent. Together, 18.3 to compared income in FY2018-19 non-interest of total year. cent in the preceding 78.8 per 81 6.2 Rs 12.0 26.0 FY2018-19 78 5.2 2.6 23.1 Rs FY2017-18 (Billion) Loans (Per cent) (Per (Per cent) (Per (Per cent) (Per

on Equity Total Assets Total NPL to Total Total NPL to deposits Ratio Post-tax Return Post-tax Liquid-assets-to- is to promote a bank’s short-term resilience to potential potential to short-termresilience a bank’s promote is to liquidity disruptions. liquid remained in Mauritius has the banking sector Overall, as at end- banking sector the for The LCR in FY2018-19. per 167.5 to per cent, compared at 246.0 stood June 2019 of banks for the LCR In general, 2018. cent as at end-June stayed major currencies and other Mauritian rupees both of the stock Further, requirements. the regulatory above basis amounted banks on a consolidated HQLA held by Rs252 to compared at end-June 2019, Rs303 billion as to 2018. billion as at end-June 8 3.2 32.6 143.8 143.8 FY2018-19 8 3.1 31.6 112.7 112.7 FY2017-18 (Per cent) (Per Capital NBDTIs (Per cent) (Per (Per cent) (Per

on Assets on Assets Number of Advances-to- Pre-tax Return Pre-tax deposits Ratio Adequacy Ratio Key Highlights Key Non-Bank Deposit Taking Institutions: Non-Bank Deposit Taking As from November 2017, banks were required to meet the meet to required banks were 2017, November As from Mauritian in requirements Ratio (LCR) Liquidity Coverage a and on currencies foreign significant in Rupees, that is a standard represents The LCR basis. consolidated inventory adequate that a bank has an ensure designed to high quality (HQLA) that assets liquid of unencumbered cash at little or into convertible consist cash or assets of liquidity its meet requirement to in market, of value loss no period. The aim of the LCR liquidity stress a 30 days’ for Banks’ Liquidity Position

Regulation and Supervision 90 Regulation and Supervision 91 50 40 30 20 10 0 2018-19 2018-19 % 88 (RHS) Coverage ratioCoverage 2017-18 2017-18 deposits Others 2016-17 2016-17 Liquid assets to total total Liquid assets to to capital to NPL net of provisions NPL net of provisions 2015-16 2015-16 % Households end-June 2019 (Per cent) (Per end-June 2019 12 assets Non-performing cent) Loans (Per Liquid Assets to Total Assets (Per cent) (Per Assets Total Liquid to Assets 2014-15 2014-15 NBDTIs Loans to the Private Sector as at Sector the Private Loans to NBDTIs Liquid assets to total total Liquid assets to NPL to total loans total NPL to 2013-14 2013-14 5 0 5 0 15 15 10 10 25 20 30 25 20 3.4 3.3 3.2 3.1 3.0 2.9 2.8 140 100 60 20 -20 -60 2018-19 Return on 2018-19 2018-19 Assets (R.H.S.) 2017-18 2017-18 Annual growth in Annual growth income loans and advances Net interest Net interest 2017-18 2016-17 2016-17 Non-Bank Deposit -Taking Institutions’ Performance Non-Bank Deposit -Taking income deposits 2016-17 2015-16 Net non-interest Net non-interest Annual growth in Annual growth 2015-16 Capital cent) Adequacy Ratio (Per 2014-15 2015-16 Provisions Loan and Deposit Growth (Per cent) (Per Loan and Deposit Growth 2014-15 ratio (RHS) Decomposition of Income (Per cent of Assets) Decomposition of Income (Per Loan to deposit Loan to 2013-14 5 0 2013-14 2014-15 15 10 35 30 25 20 - Operating Cost 5 0 -5 1.0 15 10 2.0 5.0 4.0 3.0 25 20 -10 (1.0) (2.0) (3.0) (4.0) Others Others Loans Borrowings Jun-19 Jun-19 Finance Leases Liabilities Net investment in Assets Deposits Jun-18 Jun-18 Securities, placements and other investments Shareholders' equity Cash Resources 0 0 60 50 40 30 20 10 Rs billion 60 50 40 30 20 10 Rs billion The advances-to-deposits ratio increased from 112.7 per 112.7 from increased ratio The advances-to-deposits per cent at end-June 143.8 to cent at end-June 2018 two of deposits by repayment of account mainly on 2019 ceased the business of deposit-taking which have NBDTIs their Deposit of surrendering in the process and are the leases-to-deposits Business Licence. Similarly, Taking only) leasing companies (based on deposits held by ratio the for cent per 112.6 to cent per 78.3 from increased same period. Profitability are based for NBDTIs figures profitability The consolidated ended June, years the financial for results on the audited profit aggregate NBDTIs’ December. and September Rs0.4 billion from than fivefold more after increased tax This increase billion in FY2018-19. Rs2.1 to in FY2017-18 be paid to in the amount of tax a fall mainly by driven was 3.5 summarises the performance of Table one NBDTI. for Chartyears. financial 3.8 the last three over the NBDTIs income, non-interest interest of net the evolution shows composition of assets and liabilities of NBDTIs as at end- of NBDTIs and liabilities of assets composition 2019. as at end-June and June 2018 StructureChart of NBDTIs Sheet Balance 3.7: Deposits went down by 6.8 per cent to Rs44.5 billion as 6.8 per cent to by down Deposits went the main remained but nonetheless at end-June 2019, liabilities, deposits of total of funding. As a ratio source 55.1 to end-June 2018 per cent as at 61.2 from dropped the Chart 3.7 illustrates per cent as at end-June 2019. Total assets of NBDTIs increased by 3.6 per cent to reach reach 3.6 per cent to by increased of NBDTIs assets Total of loans The share Rs80.8 billion as at end-June 2019. 55.0 per cent as at end- from increased assets total to 65.2 per cent at the end of June 2019, to June 2018 stayed assets total to leases finance in investment while the same period. per cent over at 14.0 constant Balance Sheet Structure Balance Sheet Over the period 30 June 2018 to 30 June 2019, total total 30 June 2019, to the period 30 June 2018 Over increased NBDTIs by extended facilities outstanding credit amount of while their total 3.5 per cent or Rs2.2 billion, by than a more experienced non-performing advances gross of 23.7 per cent or Rs0.8 billion. increase proportionate point was percentage of 1.0 a deterioration As a result, ratio non-performing advances observed in the gross 5.2 per cent as at end-June 2018 from which increased The outstanding 6.2 per cent as at end-June 2019. to households, which to NBDTIs by extended facilities credit represented figure, 88.2 per cent of the total comprised 88.7 per cent of non-performing advances. NBDTIs are required to maintain a minimum capital a minimum capital maintain to required are NBDTIs on per cent under the Guideline 10 of ratio adequacy Non-Bank Deposit Taking for Ratio Adequacy Capital with the applicable Guidelines comply Institutions and to adequacy The capital the Bank of Mauritius. issued by per cent as at end- 31.6 from increased of NBDTIs ratio a due to cent as at end -June 2019 32.6 per to June 2018 base capital per cent in aggregate of 9.3 higher increase 5.9 per cent in of an increase to compared of the sector an individual basis, the On assets. risk-weighted the total from ranged NBDTIs by maintained ratio adequacy capital cent as at end-June 2019. 54.3 per per cent to 12.5 Of the eight non-bank deposit-taking institutions (NBDTIs) institutions (NBDTIs) non-bank deposit-taking Of the eight at end-June 2019, as Mauritius in in operation which were activities, two in leasing involved exclusively were four two lending business only and the remaining out carried operations. leasing and lending in both involved were Mauritian Eagle Leasing Company Cim Finance Ltd and with of deposit-taking ceased the business have Limited respectively, 2019, April 19 and 2019 April 18 effectfrom their Deposit Taking of surrendering in the process and are subsidiaries/ were of the NBDTIs Four Business Licence. institutions of banking or insurance companies related holding were all NBDTIs 2019, As at end-June companies. of Rs200 million. capital the minimum required PERFORMANCE OF NON-BANK DEPOSIT-TAKING DEPOSIT-TAKING OF NON-BANK PERFORMANCE INSTITUTIONS

Regulation and Supervision 92 Regulation and Supervision 93 3.3 3.2 3.2 3.1 3.1 3.0 3.0 2.9 Per cent (Rs billion) 1.2 1.8 5.6 2.4 3.2 4.4 2.6 0.0 0.2 0.3 2.1 2.6 2.4 2018-19 2018-19

1.1 1.7 1.9 5.7 2.5 3.2 4.3 2.6 0.0 0.3 2.6 2.3 0.4 Assets (RHS) 2017-18 Return on Average 2017-18 1.1 Return on Equity 4.1 0.1 1.6 5.7 2.7 3.0 2.5 0.0 0.2 2.5 2.3 2.2 2016-17 2016-17 Per cent Liquidity representing assets liquid maintain to required are NBDTIs of their deposit liabilities. As at per cent a minimum of 10 to amounted NBDTIs held by assets liquid end-June 2019, or 26.0 per cent of their deposits, compared billion Rs11.6 per cent of deposits as at end-June 2018. 23.1 to the return on average assets and equity over the last three last the three and equity assets over on average the return years. financial Chart and Equity Assets on Average 3.9: Return of NBDTIs 7.5 5.0 2.5 0.0 17.5 15.0 12.5 10.0 2018-19

Profit Operating Income Operating 2017-18* Income Non-Interest Income 2016-17* Net Interest 0 Provision & Adjustment for credit losses credit for & Adjustment Provision Income Tax Expense Income Tax 5.0 4.5 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 Rs billion Interest Income Interest Interest Expense Interest Net Interest Income Interest Net Non-Interest Income Non-Interest Operating Income Operating Non-Interest Expense Non-Interest Operating Profit Profit Operating Other Non-Operating Profit Profit Other Non-Operating Profit before Provision & Adjustment for credit losses for credit & Adjustment Provision before Profit Profit before tax before Profit Profit afterProfit tax Financial year* *12 months period for which the accounts were audited and are different for different NBDTIs. different for different and are audited which the accounts were months period for *12 Table 3.5: Consolidated Profit and Loss Account of NBDTIs and Loss Profit 3.5: Consolidated Table The pre-tax return on average assets increased from 3.1 3.1 from increased assets on average return The pre-tax On an 3.2 per cent in FY2018-19. to per cent in FY2017-18 assets on average return pre-tax individual basis, NBDTI’s 4.0 per 0.9 per cent to from ranging diverse, quite was 2.6 per from equity on improved return cent. The post-tax in the on account of the fall per cent, mainly 12.0 cent to Chart 3.9 shows one NBDTI. be paid for to amount of tax Return on Average Assets and Return on Equity Assets Return on Average Chart 3.8: Profitability of NBDTIs income, operating income and operating profit over the over profit and operating income income, operating to 2018-19. 2016-17 years financial . as against a rise of 6.1 per cent in total per cent in total as against a rise of 6.1 7 6 , the ratio of liquid assets to total assets fell by 4.4 by fell assets total to assets of liquid , the ratio 5 Sensitivity to Market Risk Indicators Market Sensitivity to is an capital to exchange open position in foreign The net the exposure showing risk, of sensitivity market indicator to the mismatch It measures risk. rate exchange to of DTIs to liabilityand asset DTIs of positions currency foreign of movements. rate exchange vulnerabilitytheir assess to per cent as at end-June 3.1 from slightly dropped The ratio a rise due to 2.8 per cent as at end-June 2019, to 2018 within the regulatory well and stayed capital, in the total per cent of Tier 1 capital. guideline of 15 percentage points to stand at 21 per cent as at end-June per cent as at end-June stand at 21 points to percentage short liabilities to assets term of liquid The ratio 2019. 4.9 percentage by and dropped a similar trend followed in currency contraction the 23.9 per cent, due to points to and deposits assets of DTIs assets loans remained more or less unchanged except for loans loans for except unchanged less or more remained loans cent, of 25.7 per with the highest portion, around DTIs; to in non-financial corporations towards allotted loans being a share held sector The non-resident sector. the resident nearly DTIs to Loans 2019. cent as at end-June of 36.0 per a more reflecting period under review, doubled during the market. money interbank active and ProfitabilityEarnings Indicators under the period over DTIs strengthened of Profitability in rise in loan loss provisions, of a decline as a result review the Subsequently, in taxes. decrease income and interest on Assets Return namely the measures, profitability two on a year-on- Equity on and Return improved (ROE) (ROA) 0.5 by increased ROE and pre-tax ROA Pre-tax basis. year points, respectively, point and 2.8 percentage percentage per cent, per cent and 17.4 at 2.1 and stood the year, over of interest The ratio as at end-June 2019. respectively, trend an upward income also registered gross to margin 73.7 per cent to 71.5 from the year over increased and costs by per cent, partially borrowing back of lower on the of Coverage of assets. level the given finance to the DTIs almost remained income gross by expenses non-interest at 40.4 per cent as at end-June unchanged and stood 2019. Liquidity Indicators Core (FSI) Indicators Based on Financial Soundness by released assets guide definition of liquid compilation the IMF 4 Deposit Taking Institutions consist of 20 banks and 8 non-bank deposit-taking institutions. institutions. 8 non-bank deposit-taking of 20 banks and consist Institutions Deposit Taking takers’ months or less (although deposit either on demand or within three available that are assets financial (2) deposits and other (1) currency; comprise assets liquid In the Guide, core of change cash, with insignificant risk into converted that can be readily excluded); included in the reporting population are deposit takers claims with other nontraded deposits and other business conditions. under normal in value 5 above. See footnote securities. government liquid short-term excludes it since DTIs liquidity situation of the true liquidity necessarily transmit definition does not core as per FSI liquidityin decline The ratios definition of liquidity may the FSI core requirements, Ratio (LCR) Liquidity Coverage enacted these securities in line with the newly towards been moving in Mauritius have DTIs Since many Testing. under Stress section on LCR in Mauritius. See later liquidity the true situation of DTIs underestimate 7  5  6 4 The quality of the loan portfolio of the entire banking qualityThe portfolioloan the of entire the of ended quarters the four over marginally improved sector of impaired The significant writing-off process 2019. June towards a domestic bank has contributed loans made by of loans ratio gross total The NPLs to the improvement. 6.0 per cent to 6.9 per cent in June 2018 from fell DTIs distribution of the sectoral 2019H1, Over in June 2019. Asset QualityAsset Indicators The deposit-taking institutions (DTIs) sector recorded a recorded sector institutions The deposit-taking (DTIs) period the during positions capital its in growth healthy in the regulatory with an increase June 2019, to July 2018 per cent as 18.0 from ratio assets risk-weighted to capital per cent as at end-June 2019. 19.8 to at end-June 2018 a similar followed assets risk-weighted to The CET1 capital a dominant which accounts for The banking sector, trend. its capital maintained sector, of the financial share the minimum statutory requirement. above well levels mostly increase an reflected this improvement Accordingly, Weighted Risk per cent while Total of 13 in CET1 capital only by rose in the portfolio of the banking sector Assets of 1 per cent during the same period. The decline in ratio capital to of provisions Loans (NPLs) net Non-Performing per cent means that the DT 12.8 cent to per 14.3 from losses that any confront to capital more institutions have NPLs. arise from may Capital Adequacy Indicators Adequacy Capital FINANCIAL SOUNDNESS INDICATORS OF DEPOSIT OF DEPOSIT FINANCIAL SOUNDNESS INDICATORS INSTITUTIONS TAKING Total assets of cash dealers amounted to Rs683 million as to amounted of cash dealers assets Total dealers exchange of foreign with assets at end-June 2019, assets million. The bulk of cash dealers` Rs615 totaling with financial of cash in hand, balances held consisted of Mauritius securities, institutions and Government/Bank per per cent and 21 32 per cent, 27 which represented assets. of total cent, respectively, Six money changers and six foreign exchange dealers, dealers, exchange and six foreign changers Six money operation in were dealers, as cash known collectively which deal changers money Unlike June 2019. as at 30 notes, currency of foreign exchange principally in the carry authorised to out are dealers exchange foreign of remittance the provision activities which comprise other exchange and forward of spot and the conduct facilities the money-changing business. in addition to transactions, CASH DEALERS CASH

Regulation and Supervision 94 Regulation and Supervision 95 Per cent Per 7.7 2.1 2.8 4.2 6.0 4.3 17.4 11.0 47.2 21.0 11.4 12.0 12.8 19.8 18.3 23.9 73.7 40.4 36.0 22.6 25.7 151.4 250.6 Jun-19 Jun-19 3.1 1.5 8.2 4.4 6.9 2.4 4.0 11.6 71.5 14.6 14.3 16.7 18.0 10.3 21.8 28.8 25.4 40.5 49.4 38.6 33.3 155.2 235.3 Jun-18 Jun-18 7.8 1.5 4.7 9.2 4.3 0.3 3.2 17.2 14.9 10.2 18.0 18.6 10.3 33.3 26.8 40.2 68.8 49.4 38.5 22.5 35.6 151.5 150.0 Jun-17 Jun-17 ) 2 7.9 1.4 2.9 9.5 5.5 8.0 1.6 0.2 41.8 67.2 27.9 34.1 13.6 10.5 18.5 16.5 18.2 37.0 21.8 52.0 39.5 148.2 188.4 Jun-16 Jun-16 1.1 0.1 2.8 8.7 5.6 5.8 1.5 17.8 17.6 11.4 31.7 25.1 10.3 15.2 15.0 40.6 62.0 48.5 34.8 43.4 20.2 142.3 209.6 Jun-15 Jun-15 1.5 9.8 3.8 8.6 6.6 4.5 1.2 0.2 17.8 10.1 38.1 12.5 19.5 15.3 16.0 26.3 64.5 52.7 43.2 20.0 35.3 197.3 123.6 Jun-14 Jun-14 3 3 3 of Deposit Takers (Banks and NBDTIs (Banks Takers of Deposit 3 1 5 of loans to total loans total of loans to 4 Encouraged Set of Financial Soundness of Financial Soundness Set Encouraged Indicators Capital to assets to Capital Value of large exposures to capital to exposures of large Value Sensitivity to Market Risk Sensitivity Market to capital to exchange open position in foreign Net Liquid assets to short-term liabilities to assets Liquid Non-interest expenses to gross income gross to expenses Non-interest Liquidity assets total to assets Liquid Interest margin to gross income gross to margin Interest Earnings and ProfitabilityEarnings on assets Return on equityReturn Non-residents Non-residents Non-performing loans net of provisions to capital to provisions of Non-performing loans net Other domestic sectors sectors Other domestic Asset QualityAsset loans gross total non-performing loans to Gross Commercial real estate loans to total loans total loans to estate real Commercial Residential real estate loans to total loans total loans to estate real Residential Customer deposits to total (non-interbank) loans (non-interbank) total deposits to Customer Regulatory Tier 1 capital to risk-weighted assets assets risk-weighted Regulatory Tier to 1 capital Other financial corporations Interbank loans Interbank Core Set of Financial Soundness Indicators of Financial Set Core Regulatory capital to risk-weighted assets assets risk-weighted Regulatory to capital Non-financial corporations Trading income to total income total income to Trading Sectoral distribution Sectoral Following adoption of ISIC codes for sectoral definition in October 2018, the corresponding sectoral figures have changed. Hence, data are not strictly comparable with those prior to with those prior strictly comparable not are changed. Hence, data have figures sectoral the corresponding 2018, definition in October sectoral of ISIC codes for adoption Following December 2018. of as a percentage 1 capital) per cent of Tier 10 (above exposure credit large aggregate to has been revised ratio concentration of credit the measurement December 2017, As from ended the quarters per cent for per cent and 186.1 per cent, 178.3 been 171.8 have would exposures large for ratio Guideline, the corresponding Based on previous 1 capital. Tier aggregate respectively. and June 2018, 2018 March December 2017, FSIs are calculated on a domestic consolidation basis using the Financial Soundness Indicators Compilation Guide of the International Monetary Fund. Figures may be slightly different from from different slightly be may Monetary Figures Fund. International the of Guide Compilation Indicators Soundness Financial the using basis consolidation domestic a on calculated are FSIs partsother of this Report. Institutions. Non-Bank Deposit-Taking to refer NBDTIs agreements repurchase finance leases, and advances, credit finance trade loans to credit, loans, hire-purchase installment loans, include commercial 2018, October loans, prior to gross Total overdrafts. as a deposit, and classified not Personnel expenses to non-interest expenses non-interest to expenses Personnel 4  5  1  2  3  Table 3.6: Financial Stability 3.6: Financial Indicators Table

Regulation and Supervision 4 Developments Financial Markets Mohur

The word ‘mohur’ or ‘mohor’ comes from the Persian word ‘muhr’ which means “seal” and is related to the Sanskrit word “mudra” which also means “seal”. A mohur is a gold coin that was struck by several government including British India. The gold mohurs issued by the Moghul Empire, the British East India Company or the British Crown are valuable collector’s items. They were used in Mauritius in many transactions. A mohur was usually equivalent to fifteen silver rupees. Financial Markets Developments 99 %

%

Nil Nil Bonds 20 Year 20 Year 6.10 5.86 Bonds 20 Year 20 Year Rs 3.0 billion Rs 4.2 billion % 6.04–6.22 % %

FY2018-19 FY2018-19 FY2018-19

Rs 5.3 billion Nil Nil Rs 12.2 billion Rs 12.2 Rs 16.4 billion Rs 16.4 Rs 115.9 billion Rs 115.9 Bonds 15 Year Year 15 5.21 5.98 Bonds 5.98 % 15 Year Year 15 Rs 1.8 billion Rs 1.8 Rs 1.5 billion Rs 1.5 % %

Nil Nil Bonds 5.03 5.23 10 Year Year 10 Bonds 10 Year Year 10 Rs 5.5 billion Rs 5.5 billion 4.35-5.42 % % FY2017-18 FY2017-18 FY2017-18

%

Rs 18.8 billion Rs 18.8 Rs 8.0 billion Rs 21.6 billion Rs 21.6 Rs 92.1 billion Rs 92.1 4.11 4.74 5 Year 5 Year Bonds 5 Year 5 Year Bonds % 3.42–5.15 Rs 7.2 billion Rs 7.2 Rs 14.0 billion Rs 14.0 Rs 10.1 billion Rs 10.1 Rs 15.7 billion Rs 15.7 %

%

4.19 3.28 Notes 3 Year 3 Year Notes 3 Year 3 Year 3.69–4.55 % Rs 18.4 billion Rs 18.4 Rs 20.2 billion Rs 21.0 billion Rs 21.0 Rs 19.4 billion Rs 19.4 % %

FY2016-17 FY2016-17 FY2016-17 Rs 9.0 billion Rs 6.4 billion Rs 16.0 billion Rs 16.0 Rs 69.0 billion Bills 3.38 2.69 Treasury Treasury % 2.14–3.80 Bills Treasury Treasury Rs 37.9 billion Rs 37.9 Rs 50.8 billion Rs 40.7 billion Rs 36.9 billion FY2018-19: FY2017-18: FY2017-18: FY2018-19: Sterilisation of Proceeds: of Proceeds: Sterilisation Average: FX intervention: FX intervention: Range for FY2018-19: Range for FY2018-19: for Average FY2017-18: for Average Issued Maturing Yields Liquidity Auctions Mauritius (End of FY) Outstanding Intervention Rupee Excess Rupee Excess by the Bank of by Foreign Exchange Exchange Foreign Instruments issued Main Highlights of FY2018-19 Main Highlights The Bank conducted open market operations on the domestic money market with a view to maintaining rupee reserves reserves rupee maintaining to view a with market domesticmoney the on operations market open conducted Bank The The Bank Rate. Repo with the Key consistent a level banks and to by reserves demand for the possible to as close as and to rate, volatilityexchange rupee the of excessive contain to market exchange the domestic on intervenes foreign policy is also geared intervention The Bank’s fundamentals. macroeconomic reflects rate exchange that the ensure shocks. against external build resilience to reserves exchange country’s the foreign increasing towards

Jun-19

Apr-19 Jun-19

Feb-19 Apr-19

Dec-18 Feb-19

500.0 Oct-18 Dec-18

8,974.4 2019

Rs mn Aug-18

Oct-18 12,755.5 Amount 34,025.0 59,648.6

115,903.5

Aug-18

Jun-18 outstanding

as at 28 June

Jun-18 Apr-18

Apr-18 Feb-18

Feb-18 Dec-17

Dec-17 Oct-17

500.0

Oct-17

Aug-17 8,974.4 2018

Rs mn

Aug-17 95,135.4 17,776.6 37,050.0 Amount 30,834.4 as at 28 Jun-17

December

Jun-17 outstanding

Apr-17

Apr-17

Feb-17 BoM Bills matured

Feb-17

Dec-16

Dec-16

Oct-16

Oct-16

Aug-16 500.0 Aug-16

8,974.4

Jun-16 Rs mn 19,774.6 Jun-16 92,079.1 Amount 27,050.0 35,780.1

as at end- Apr-16 June 2018

outstanding Apr-16

BoM Bills issued

Feb-16

Feb-16

Dec-15

Dec-15

Oct-15

Oct-15

Aug-15

Aug-15

Jun-15

Jun-15

Apr-15 Apr-15

Outstanding Instruments Issued by the Bank of Mauritius Issued by Outstanding Instruments The overall weighted yield of Treasury Bills declined during yield of Treasury weighted The overall FY2018-19 … and pursued the issuance of BOM bills to keep excess excess keep to bills issuance of BOM the … and pursued limits. tolerable within reserves

Feb-15 Feb-15 0 Rs million Per cent Total 15 Year Bank of Year 15 Mauritius Bonds 3-Year Golden 3-Year Jubilee Bonds BOM Notes BOM Special Deposits BOM Bills BOM 4.0 3.7 3.4 3.1 2.8 2.5 2.2 1.9 1.6 1.3 Note: Figures may not add up to total due to rounding due to total add up to not may Figures Note:

8,000 6,000 4,000 2,000

14,000 12,000 10,000

Jun-19

Jun-19 Jun-19

Apr-19

Apr-19 Apr-19

Feb-19

Feb-19 Feb-19

Dec-18

Dec-18 Dec-18

Oct-18

Oct-18 Oct-18

Aug-18 Aug-18 Aug-18

Jun-18 Jun-18 Jun-18

Apr-18 Apr-18 Apr-18

20-year

Feb-18

Feb-18 Feb-18

Dec-17 Dec-17 Dec-17

Oct-17 Oct-17 Oct-17

Aug-17 Aug-17 Aug-17

Jun-17 Jun-17

Purchase Jun-17

15-year

Apr-17 Apr-17 Apr-17

Selected Indicators for Financial Markets Financial for Indicators Selected (US dollar equivalent)

Feb-17 Feb-17 Feb-17

Dec-16 Dec-16 Dec-16

Oct-16 Oct-16 Oct-16

Aug-16 Aug-16

Aug-16

10-year

Jun-16 Jun-16 Jun-16

Sale of

US dollars

Apr-16 Apr-16 Apr-16

Feb-16 Feb-16 Feb-16

Dec-15 Dec-15 Dec-15

5-year

Oct-15 Oct-15 Oct-15

Aug-15 Aug-15 Aug-15

Jun-15 Jun-15 Jun-15

Apr-15 Apr-15 Apr-15

Feb-15 of Mauritius Government long-term Yields on medium- to of 3.5-6.0 per cent. range within the bonds narrowed Rupee excess reserves were contained with the Bank’s with the Bank’s contained were reserves excess Rupee operations. conduct of open market The Bank continued to intervene on the domestic foreign intervene on the domestic foreign to The Bank continued curtail to undue volatility… market exchange Feb-15 Feb-15 0 0 80 60 40 20 Per cent Rs million 220 200 180 160 140 120 100 USD million 7.5 7.0 6.5 6.0 5.5 5.0 4.5 4.0 3.5 3.0 8,000 6,000 4,000 2,000 20,000 18,000 16,000 14,000 12,000 10,000

Financial Markets Developments 100 Financial Markets Developments 101 2018-19 absorption (-) Net injection (+)/ 2017-18 Other 2016-17 Notes & Coin in Circulation 2015-16 Bank of Mauritius 2014-15 Government 0 Rs million The disconnect between the KRR and short-term money short-termKRR and the money disconnect between The years, during preceeding prevailed that had rates, market aggressive Bank’s the following duly eliminated was during FY2018-19. operations conduct of open market liquidity conditions in the domestic money Mirroring within hovered generally has yield Bill 91-Day the market, Rate Repo i.e., the Key of the policy rate, the corridor 3.50 around from It dropped (KRR) since February 2018. per cent at the end of May 2.14 to per cent in July 2018 at 3.03 per cent (Chart closing the year 4.3). before 2019, rates, market most short-term money Concomitantly, rate interbank average weighted overnight the including excess in the surge from pressures declined, reflecting interbank an outlier transaction, for Barring liquidity. on short-term lending, charged which are rates interest during FY2018- 2.00-3.70 per cent between fluctuated 0.70-3.75 per cent in the preceeding to compared 19 were rates interest interbank higher The year. financial on Rates the second half of FY2018-19. observed over of 2.00-3.70 in the range hovered market the call money 0.70-3.75 per cent in FY2017-18. to per cent compared between short on varied transactions notice rates Interest compared 2.00 per cent and 3.60 per cent in FY2018-19, Interest 0.85 per cent and 3.75 per cent in FY2017-18. to per 2.10 from ranged transactions money on term rates a range to compared 3.60 per cent in FY2018-19 cent to weighted The overall per cent in FY2017-18. of 1.50-3.75 basis 113 by increased rate interest interbank average to FY2017-18 in cent per 2.39 of average an from points, of 3.52 per cent in FY2018-19. an average Chart Reserves 4.2: Main Drivers of Rupee Excess of Banks 40,000 30,000 20,000 10,000 -10,000 -20,000 -30,000 2018-19

2017-18

Banks' Rupee Excess Reserves (12 month average) 2016-17

2015-16

(End of FY) Banks' Rupee Excess Reserves 2014-15

0 Rs million 8,000 6,000 4,000 2,000 14,000 12,000 10,000 Despite the Bank’s open market operations, the 12-month the 12-month operations, open market the Bank’s Despite in billion Rs12.2 to liquidity grew excess rupee average financial Rs8.0 billion in the previous up from FY2018-19, of Rs114.9 total The Bank mopped up a (Chartyear 4.1). against maturing securities billion during FY2018-19, issue of a net the tune of Rs96.3 billion, representing to requirements, borrowing its meet to order In billion. Rs18.6 the short,securities in issue continued to Government under During the period tenors. medium and long term around to amounted expenditure government net review, issuance of a net by financed Rs22.5 billion, which was Domesticbillion. currency Rs21 for securities Government Rs2.3 billion. around by increased in circulation Chart 4.1: Banks’ Rupee Excess Reserves Banks’ Rupee Excess Chart 4.1: The Bank’s open market operations during FY2018- operations open market The Bank’s an of maintaining the objective guided by remained 19 liquidity the banking in excess rupee of level optimal the that short-term particular, yields, in ensure to system corridor. rate within the interest Bill yield, remain 91-day liquidity portion is deemed A large excess of the rupee liquidity some excess keep to tend Banks as structural. public demand, for cater as precautionary balances to Bank’s of the periods. In spite during festive instance for level, liquidity at an adequate keep to determination banks, by reserves for demand the with line in broadly over volatile liquidity rupee rather was of excess the level FY2018-19.

8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0

Jun-19

Jun-19 Jun-19

Rs million Apr-19

Mar-19 Mar-19 Feb-19

Dec-18

Dec-18 Dec-18

Oct-18

Sep-18 Sep-18 Aug-18

Jun-18

Jun-18 Jun-18

Upper Bound Apr-18 Upper Bound

Mar-18 Mar-18 Feb-18

Dec-17

Dec-17 Dec-17

Oct-17

Sep-17 Sep-17 Aug-17 Rs/US$ (LHS)

Key Repo Rate

Key Repo Rate

Jun-17

Jun-17 Jun-17

Apr-17

Mar-17 Mar-17 Feb-17

Dec-16

Dec-16 Dec-16

Lower Bound

Lower Bound Oct-16

Sep-16 Sep-16 (Rs equivalent) Aug-16

Total USD purchase

Jun-16

Jun-16 Jun-16

Apr-16

Mar-16 Mar-16 Feb-16

91-Day Yield

364-Day Yield

Dec-15

Dec-15 Dec-15

Oct-15

Sep-15 Sep-15

Aug-15

Jun-15

Jun-15 Jun-15 Rs/US$ Per cent Per cent 6.5 5.5 4.5 3.5 2.5 1.5 0.5 6.5 5.5 4.5 3.5 2.5 1.5 0.5

37.00 36.50 36.00 35.50 35.00 34.50 34.00 33.50 33.00

Jun-19

Jun-19 Jun-19

Mar-19

Mar-19 Mar-19

Dec-18

Dec-18

Dec-18

Sep-18

Sep-18

Sep-18

Jun-18

Jun-18 Upper Bound Jun-18

Upper Bound

Mar-18 Mar-18

Mar-18

Dec-17 Dec-17

Dec-17

Sep-17 Sep-17 Key Repo Rate Sep-17

Key Repo Rate Jun-17 Jun-17

Jun-17

Mar-17 Mar-17

Mar-17

Dec-16 Dec-16

Lower Bound

Lower Bound Dec-16

Sep-16 Sep-16 Banks’ rupee excess liquidity

Sep-16

Jun-16 Jun-16

Jun-16 Mar-16 Mar-16

182-Day Yield Mar-16 Dec-15 Dec-15

Overnight WAI Rate

Dec-15 Sep-15 Sep-15

Jun-15 Jun-15 Sep-15

Per cent Per cent 6.0 5.5 5.0 4.5 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 Jun-15 0.5 1.5 2.5 3.5 4.5 5.5 6.5 Chart 4.3: Excess Liquidity and Money Market Rates Chart Liquidity Market 4.3: Excess and Money 0 Rs million 8,000 6,000 4,000 2,000 20,000 18,000 16,000 14,000 12,000 10,000

Financial Markets Developments 102 Financial Markets Developments 103 5,454 9,540 9,028 5,296 18,775 (Rs million) Amount Sterilised Amount Sterilised 21,637 15,957 17,443 13,600 20,902 Purchases of US Dollars Purchases (Rupee million) Equivalent, Total turnover on the domestic interbank foreign exchange exchange foreign on the domestic interbank turnover Total the BoM, increased intervention by excluding market, US$720 million in FY2017- US$26 million, from by marginally million of which US$394 FY2018-19, million in US$746 to 18 and of US dollar against the rupee purchases represented foreign of US dollar against other million purchases US$247 of banks rates interbank opening average The currencies. per US dollar in Rs36.0100 to Rs34.2762 from ranged FY2018-19. Foreign Exchange Market Exchange Foreign exchange domestic intervened on the The Bank foreign excessive out of smoothing objective with the market that ensure to and rate volatilityexchange rupee in the country’s the economic reflects rate exchange the rupee through of US dollars purchases The Bank’s fundamentals. US$643 million in from banks dropped from intervention 4.1). (Table US$466 million in FY2018-19 to FY2017-18 of sterilising its policy the Bank maintained Concurrently, exchange on the foreign interventions from the proceeds reserves. excess of rupee the build-up contain to market Rs5.3 billion were deposits totalling special Accordingly, at an interest a period of one year for placed with the Bank cent. An 2.60 per cent and 3.60 per between ranging rate a deposits for billion of special additional amount of Rs7.5 banks, at rates mobilised from was 2 years period of up to 3.73 per cent. cent to 2.85 per from ranging Market Exchange Foreign Interbank towards some sophistication of the domestic FX market. some sophistication of the domestic FX market. towards transactions in total transactions of forward The share 4.2). per cent (Table 14.6 per cent to 11.6 from rose primarily and sales remained purchases currency Foreign which represented and Euros, in US dollars denominated in transactions 60.3 per cent and 29.5 per cent of total per cent, 58.8 per cent and 30.1 to compared FY2018-19, 4.3). (Table in FY2017-18 respectively, 407 583 450 643 466 (US$ million) Purchases of US Dollars Purchases FY 2014-15 FY 2015-16 FY 2016-17 FY 2017-18 FY 2018-19 Period Table 4.1: Foreign Exchange Intervention by the Bank Intervention Exchange by Foreign 4.1: Table The Bank’s determination to enhance the monetary enhance the to determination The Bank’s in the growing is highlighted mechanism transmission which instruments, Mauritius of Bank of outstanding stock billion as at end- Rs92.1 25.8 per cent, from by expanded However billion as at end-June 2019. Rs115.9 to June 2018 cost the of conducting monetary policy, this has increased of the on the profitability extent a great to which weighs Bank. The Bank scaled up its open market operations to reduce reduce to operations market scaled up its open The Bank instruments, own the issue of its liquidity through excess Bank FY2018-19, During short-term long-term. and both nominal a total for issued Bills were of Mauritius (BoM) Notes Mauritius of Bank and billion Rs95.4 of amount billion. BoM Bills in nominal amount of Rs12.0 a total for a total for and 364-Day 182-Day 91-Day, tenors, the three put on tender of Rs95.6 billion were nominal amount a billion. Bids for against BoM Bills of Rs71.5 maturing received. were billion of Rs195.4 nominal amount total 99.8 per represented of bids accepted amount The total cent of total amount and 48.8 per tender cent of the total from yields dropped average The weighted bids received. per cent in the 91- 3.64 per cent, 3.66 per cent and 3.77 2018 June in respectively, bills, 364-Day and 182-Day Day, of 2.54 per cent, 2.79 per cent and 3.00 an average to of 2-Year, Mauritius Notes Bank of per cent in June 2019. billion Rs10.0 maturities amounting to and 4-Year 3-Year oversubscribed; All auctions were put on tender. were billion and Rs21.7 to amounting bids received with total BoM securities accepted. billion was an amount of Rs12.0 issued billion were nominal amount of Rs107.4 a total for billion, the tune of Rs82.1 against maturing securities to issuance of 25.3 billion. a net representing Issue of BoM securities Issue of Turnover on the domestic foreign exchange market market exchange on the domestic foreign Turnover to billion during FY2017-18 US$11.4 from increased were Transactions FY2018-19. billion during U$12.5 which totalled market in the spot mostly concentrated 85.4 per cent of total for accounted billion and US$10.7 US$1.3 from increased transactions Forward transactions. hinting billion in FY2018-19, US$1.8 to billion in FY2017-18 Foreign Currency Transactions Currency Foreign FY2018-19 Total (US$ million) (US$ million) 4,543.9 4,344.5 11,418.9 12,471.7 Turnover Bids received FY2017-18 429.6 435.5 Others Total 5,452.6 6,050.5 Bids accepted GBP 131.9 131.9 172.8 172.8 Sales FY2016-17 576.6 686.0 Forward Bills maturing Sales EUR 895.5 958.6 FY2015-16 More More 3,767.9 3,857.8 than US$ 20,000 or equivalent Tender amount Spot USD 3,017.8 2,846.6 FY2014-15 Less 1,108.0 1,506.6 0 Treasury Notes Treasury the Bank continued with the monthly During FY2018-19, new Five Notes. Treasury issuance of Three-Year of previous re-openings issues and seven benchmark liquidity ample providing to held with a view issues were amount of Rs22,600 million was total A in the instruments. at Rs21,025 stood and the amount accepted put on tender million. Rs31,171 totalled million, while maturing Notes Chart of Mauritius 4.4: Auctioning of Government Bills Treasury 80 60 40 20 than US$ 20,000 or equivalent 180 160 140 120 100 Rs billion Total 4,487.5 4,487.5 4,492.9 Total 6,421.3 5,966.3 116.8 116.8 104.6 104.6 Others 745.1 1,130.3 Forward GBP 271.9 271.9 235.5 Purchases Purchases More More 3,747.8 3,357.2 EUR than US$ 1,768.7 1,709.3 20,000 or equivalent Spot USD Less 1,473.4 1,933.7 2,347.6 2,347.6 2,425.9 than US$ 20,000 or equivalent FY2017-18 FY2018-19 FY2017-18 FY2018-19 The Bank acts as agent of Government with regard to to with regard The Bank acts as agent of Government short-term finance to debt instruments of issuance the investment and longer-term requirements borrowing Bills, Treasury Treasury include These generally projects. Bonds. Government of Mauritius and Government Notes issued maturities are longer-term securities of medium to the Issuance Plan for with the Government’s in accordance The advance. well in market to the released year, financial of weekly of the range in advance is also informed market months. The actual two the next Bills for issues of Treasury for be put on tender Bills to of Treasury amount and tenor the market to also communicated are weeks two the next public improving to ahead of the auction. With a view a new introduced cash management, Government sector of Mauritius Treasury the Government namely instrument, weekly basis issued on a which are Certificates (GMTCs) the 91- Bodies (NFPSBs) in Non-Financial Public Sector to The June 2019. as from tenors and 364-Day 182-Day Day, subsequently were the GMTCs of and tenor frequency basis in the 182- issued daily on a tap now and are revised, is applicable on the GMTCs rate The interest tenor. Day Government in the 182-Day yield registered the weighted Bills/Bank of Mauritius Bills, at the of Mauritius Treasury primary Friday. auction held on the preceding Issue of Government Securities Issue of Government Table 4.3: Foreign Currency Purchases and Sales by Major Currencies and Sales by Purchases Currency Foreign 4.3: Table Table 4.2: Foreign Currency Transactions Currency 4.2: Foreign Table

Financial Markets Developments 104 Financial Markets Developments 105 246* 246* 6.00 600 1,400 1,400 1,800 1,800 1,800 1,800 4,200 9,640 3,800 4,620 5,500 3,640 5,500 16,100 16,100 21,025 21,025 15,700 15,700 15,500 15,500 36,250 50,755 22,600 FY2018-19 5.20 235* 1,200 1,200 1,200 1,200 1,500 1,500 1,500 1,500 3,000 9,735 3,000 3,460 5,500 4,900 5,500 14,000 14,000 14,000 14,000 13,640 13,640 32,600 20,200 45,495 20,000 FY2017-18 6.00 600 3.50 8,717 8,717 4,190 4,190 1,965 1,965 1,300 1,300 1,500 1,500 1,500 1,500 3,400 3,400 4,800 4,800 19,190 19,190 12,727 12,727 14,800 14,800 14,800 14,800 19,200 19,200 32,035 40,622 FY2016-17 2.80 1,951 1,951 1,500 1,500 1,500 1,500 3,000 6,655 3,000 4,500 9,495 4,500 4,600 4,600 8,054 8,300 15,917 15,917 16,441 16,441 31,344 31,344 10,887 10,887 18,000 18,000 FY2015-16

five re-openings aimed at creating adequate liquidity to adequate creating aimed at re-openings five trading of the secondary development the market foster the Bank In FY2018-19, securities. Government of these of Mauritius Government of Ten-Year issues held three and 7 December 2018 2018, on 20 July Bonds namely put nominal amount The total respectively. 7 June 2019, bids received and total Rs5,500 million was on tender amount of Rs5,500 A total million. Rs16,100 to amounted accepted. million was 2,200 5,085 2,200 5,303 4,700 6,083 4,900 15,197 15,197 10,100 10,100 14,237 14,237 31,302 31,302 17,220 17,220 17,300 17,300 10,520 10,520 47,605 47,605 FY2014-15 Value Bids Accepted (Rs million) Bids Accepted Value Value Bids Received (Rs million) Bids Received Value Twenty-Year Government of Mauritius Bonds Government Twenty-Year (Rs million) Amount of Bonds put on Tender Weighted Average Yield of Bids Accepted (% p.a) Yield of Bids Accepted Average Weighted Value Bids Accepted (Rs million) Bids Accepted Value Value Bids Received (Rs million) Bids Received Value Fifteen-Year Inflation Indexed Government of Government Inflation Indexed Fifteen-Year Mauritius Bonds (Rs million) Amount of Bonds put on Tender Weighted Average Yield of Bids Accepted (% p.a) Yield of Bids Accepted Average Weighted Value Bids Accepted (Rs million) Bids Accepted Value Value Bids Received (Rs million) Bids Received Value Fifteen-Year Government of Mauritius Bonds of Mauritius Government Fifteen-Year (Rs million) Amount of Bonds put on Tender Value Bids Accepted (Rs million) Bids Accepted Value Value Bids Received (Rs million) Bids Received Value Ten-Year Government of Mauritius Bonds Government Ten-Year (Rs million) Amount of Bonds put on Tender Value Bids Accepted (Rs million) Bids Accepted Value Value Bids Received (Rs million) Bids Received Value Five-Year Government of Mauritius Bonds Government Five-Year (Rs million) Amount of Bonds put on Tender Value Bids Accepted (Rs million) Bids Accepted Value Value Bids Received (Rs million) Bids Received Value Three-Year Treasury Notes Treasury Three-Year (Rs million) put on Tender Amount of Notes (vi) (v) (iv) (iii) (ii) (i) * Weighted Bids Margin Aceepted (basis points) Aceepted Bids Margin * Weighted Table 4.4: Auctions of Government of Mauritius Securities of Mauritius Auctions 4.4: of Government Table During the FY2018-19, Government raised a total amount amount a total raised Government FY2018-19, During the issue of long-term the net million through of Rs27,800 under the period Bonds. For of Mauritius Government of Government auctions of Five-Year eight review, nominal out and a total carried were Mauritius Bonds These accepted. million was amount of Rs15,700 Bonds and Benchmark New of three included the issue Long-Term Government of Mauritius Bonds of Mauritius Government Long-Term

3 - - Nil Nil 19.75 19.75 101.27 101.27 1,000.0* 1,000.0* 500.0* 7-Dec-18 14-Dec-18 2 3Y-GMTNotes 3Y-GMTNotes - - Nil Nil 200.1 200.1 1,000.0* 1,000.0* 9-Nov-18 101.114 101.114 1,000.0* 1,000.0* 7-Dec-18 2 5Y-GM Bonds 5Y-GM - - Nil Nil Nil Nil Nil 220.5 1,000.0* 1,000.0* 9-Nov-18 1,000.0* 1,000.0* 5-Oct-18 3Y-GMTNotes 3Y-GMTNotes - - Nil 200.1 1,000.0* 1,000.0* 5-Oct-18 100.0 100.0 101.92 101.92 1,000.0* 1,000.0* 21-Sep-18 Both auctions were oversubscribed with a bid-cover ratio ratio with a bid-cover oversubscribed were auctions Both of nominal amount and a total 2.4, respectively, of 2.7 and accepted. million was Rs4,200 in the Three-Year auctions held eight reverse The Bank seven and Notes Mauritius Treasury of Government of Mauritius Government in the Five-Year auctions reverse amount of Rs7,500 million during an aggregate Bonds for million at Rs820.1 stood accepted The amount FY2018-19. in million received amount of Rs1,220.1 against total a Notes Treasury of Mauritius Government the Three-Year period, the 4.5). During the same (Table below as shown million against Rs340.25 only Rs119.75 Bank accepted of Mauritius Government the Five-Year in million received 4.6). Bonds (Table - - Nil Nil 1,000.0* 1,000.0* 21-Sep-18 - - 1 Nil Nil 1,000.0* 1,000.0* 7-Sep-18

1 - - Nil 200.0 1,000.0* 1,000.0* 7-Sep-18 5Y-GM Bonds 5Y-GM - - Nil Nil 1,000.0* 1,000.0* 10-Aug-18 3Y-GMTNotes 3Y-GMTNotes 620.0 620.0 101.115 101.115 1,000.0* 1,000.0* 10-Aug-18 - - Nil Nil - - Nil Nil 1,000.0* 1,000.0* 27-Jul-18 1,000.0* 1,000.0* 27-Jul-18 Amount put on (Rs mn) Tender Amount put on (Rs mn) Tender Value of Bids Value (Rs mn) Received of Bids Value (Rs mn) Accepted Highest Price (%) Accepted Weighted Price of Weighted (%) Bids Accepted Value of Bids Value (Rs mn) Received Value of Bids Value (Rs mn) Accepted Highest Price (%) Accepted Weighted Price of Weighted (%) Bids Accepted Reverse Auction for an aggregate nominal amount of Rs1,000 million for 4.25 per cent 3-Year 4.25 per cent 3-Year million for Rs1,000 nominal amount of an aggregate for Auction Reverse of Mauritius Bonds Government 5-Year and 4.30 per cent Notes of Mauritius Treasury Government Reverse Auction for an aggregate nominal amount of Rs1,000 million for 4.25 per cent 3-Year 4.25 per cent 3-Year million for nominal amount of Rs1,000 an aggregate for Auction Reverse of Mauritius Bonds Government and 4.30 per cent 5-Year Notes of Mauritius Treasury Government 3.59 per cent 3-Year Government of Mauritius Treasury Notes due on 19 February 2019 due on 19 Notes of Mauritius Treasury Government 3.59 per cent 3-Year June 2019 due on 24 Notes of Mauritius Treasury Government 3.40 per cent 3-Year 4.25 per cent 3-Year Government of Mauritius Treasury Notes due on 20 November 2018 due on 20 November Notes of Mauritius Treasury Government 4.25 per cent 3-Year 4.30 per cent 5-Year Government of Mauritius Bonds due on 18 October 2018 October of Mauritius Bonds due on 18 Government 4.30 per cent 5-Year of Mauritius Bonds due on 25 April 2019 Government 5.20 per cent 5-Year 1. 1. 2. 3. 4. 5. 2. 3. 4. 5. *  1 2 Table 4.6: Reverse Auction of Five-Year Government of Mauritius Bonds of Mauritius Government Auction of Five-Year 4.6: Reverse Table 1 2 3 Table 4.5: Reverse Auction of Three-Year Government of Mauritius Treasury Notes of Mauritius Treasury Government Auction of Three-Year 4.5: Reverse Table The Bank conducted an issue of the Fifteen-Year Fifteen-Year issue of the an conducted The Bank a nominal amount Bonds for of Mauritius Government The auction was FY2018-19. million during of Rs1,800 The Bank of 2.0. ratio a bid-cover with oversubscribed of Government Inflation-Indexed Fifteen-Year issued a issued were The Bonds 5 April 2019. Mauritius Bonds on at the weighted annually payable bearing interest at par, inflation average plus the 12-month bid margin accepted Statistics Mauritius as at end-February, published by rate of Rs4,620 nominal amount a total Bids for every year. amount of Rs600 million a total and received million were points. basis 246 of margin bid weighted the at issued was auctions of Twenty-Year two The Bank also conducted 2018 Mauritius Bonds on 7 September of Government of Rs3,800 million. amount a total for and 8 February 2019, * 

Financial Markets Developments 106 Financial Markets Developments 107 41,651 10,596 58,309 26,496 24,187 11,455 20,165 61,278 99,960 (Rs million) Total (FY Total 2018-19) 192,858 11,126 2,087 56,049 22,620 23,008 12,797 46,810 13,065 79,056 Total (FY Total 2017-18) 140,751 883 787 1,104 3,990 5,448 2,212 7,472 2,600 6,552 Jun-19 17,024 769 8,587 2,457 6,925 2,310 1,529 1,526 5,535 15,513 May-19 24,103 422 5,461 3,696 6,054 2,851 1,346 1,034 6,968 Apr-19 11,514 20,863 853 6,150 1,289 3,034 8,826 1,731 2,234 6,054 Mar-19 14,977 24,118 529 827 6,410 1,940 3,207 1,314 9,616 4,731 2,261 Feb-19 16,487 415 766 streams and existing debt-servicing requirements. As at debt-servicing existing and requirements. streams by be repaid the outstanding balance to end-June 2019, EUR6.3 million. to banks amounted Primary and Secondary Dealer System Market Trading their activities, of an annual review following 2019, In March Primary four namely, Dealers, of the existing the license Bank Mauritius Limited, Barclays AfrAsia Bank Limited, Ltd and the Mauritius Commercial SBM Bank (Mauritius) period. a one-year for renewed was Bank Limited of the Primary is to The main objective Dealer System Government both for the secondarydevelop market The securities in all tenors. and Bank of Mauritius in has assisted system, of the E-Bond implementation and deepening the secondaryenhancing efficiency the development also allowed in Mauritius. It has market yield curveof a benchmark that will enhance price The instruments. market money of a range discovery for secondary out on the carried of transactions volume total Primary by and non-Primary Dealers market Dealers billion in FY2017- Rs140.8 per cent, from 37.1 by increased cent of Nearly 52 per in FY2018-19. billion Rs192.9 to 18 Banks, of which non- out by carried were transactions total of the major share Primary for Banks accounted Dealer amount of Rs58.3 billion a total 58 per cent for around 4.7) (Table 911 944 1,164 6,480 1,121 7,246 2,523 Jan-19 11,801 604 889 1,886 1,923 2,589 2,491 5,897 1,385 2,575 Dec-18 11,851 788 986 3,218 1,758 3,354 2,144 1,595 6,572 4,689 Nov-18 13,843 521 3,111 1,600 3,301 1,177 1,461 1,033 4,665 4,900 Oct-18 12,204 729 965 1,374 3,471 3,280 4,189 1,781 6,751 2,086 Sep-18 13,686 829 989 1,521 3,375 6,380 1,337 1,679 9,755 4,030 Aug-18 16,111 508 854 839 510 3,234 3,163 1,661 4,073 4,525 Jul-18 10,768 Individuals Total Other Non-Financial Institutions Insurance Insurance Companies Non-Bank Financial Institutions of which: Funds Pensions Non-Primary Dealer Banks Banks of which: Primary Dealers Note: The Bank issued a revised guideline for Primary guideline for in April 2018. Dealers The Bank issued a revised Note: Table 4.7: Secondary Market Transactions by Counterparty by Transactions Secondary 4.7: Market Table The Bank introduced a Special Foreign Currency Line Currency a Special Foreign The Bank introduced operators the export and tourism for in 2012 Credit of their income between mismatches currency address to Credit Facilities - Special Line of Credit in Foreign Currency in Foreign - Special Line of Credit Facilities Credit Total turnover on the interbank money market fell from from fell market money on the interbank turnover Total billion during Rs270.0 to in FY2017-18 billion Rs307.7 transactions, interbank daily average The FY2018-19. FY2018-19, in million Rs826 to dropped consequently, segment market call money Rs986 million. The from transactions of total two-thirds nearly for accounted in than the 56 per cent recorded higher in FY2018-19 the call on transactions daily On average, FY2017-18. million in FY2018-19 Rs618 to segment amounted money in total The fall Rs593 million in FY2017-18. to compared volume the lower to be attributed may turnover interbank under the shortof transactions which segment, notice billion in Rs30.1 to billion in FY2017-18 Rs123.9 from fell the same trend, followed figures Daily average FY2018-19. Rs289 million to FY2017-18 Rs642 million in from moving increased transactions money term Total in FY2018-19. billion in Rs61.3 to in FY2017-18 billion Rs11.9 from almost transactions such that the daily average FY2018-19 million. Rs414 million to Rs212 doubled from Interbank Money Market Money Interbank The Bank manages the foreign exchange reserves within reserves exchange manages the foreign The Bank the strategic by defined limits currency and class asset the and the Board, by guidelines approved allocation asset is to policy Bank’s The budget. risk approved within the securities. grade investment only in invest management of part the The Bank has entrusted of the managers tier external top to reserves exchange foreign of the characteristics the risk diversify to in an endeavor profile. as boost its return portfolio, as well significant challenges presents environment The market reserves. exchange management of foreign the for to return a by marked year, volatile a been has FY2018-19 monetary major economies as the growth policy easing in pessimistic while inflation stayed more outlook turned uncertain Brexit war, The US-China trade low. generally a significant had tensions geopolitical as well as outcome, classes, and on the performance of major asset impact portfolio. of the overall return on the risk-adjusted therefore Reserves are managed in accordance with section with accordance in managed Reservesare the whereby 2004, of Mauritius Act 46 (2) of the Bank foreign of the official the composition determines Board liquidity and their security, achieve aims to and reserves are objectives These three of priority. in that order return, and a well-diversified of construction the upheld through buckets, in various portfolio, which is tranched optimized guidelines and duration. investment with different Foreign ReservesForeign Management reserves official international of gross The country’s level to at end-June 2018 billion as Rs230.5 from (GOIR) rose US Dollar terms In 2019. billion as at end-June Rs253.3 the billion over $7.2 $6.7 billion to from GOIR increased months of 11.8 an import cover same period, representing external a solid buffer against adverse and providing exchange on the domesticshocks. Intervention foreign the period over USD465.9 million of tune the to market in the increase to substantially contributed under review GOIR.

Financial Markets Developments 108 Payment and Settlement Systems and Currency Management 5 Management Systems and Currency Systems Payment and Settlement Payment Spanish dollar

The Spanish dollar, also known as the silver piaster or piece of eight, was a silver coin worth eight reals. It was widely used by many countries as the international currency for commercial transactions by virtue of its uniformity, but also by virtue of the Spanish power and ownership of the new South American silver mines. It is symbolised with a letter S with two vertical bars superimposed between the units and subdivision. Payment and Settlement Systems and Currency Management 111 Rs36.4 billion Total notes and notes Total coins in circulation: COMESA REPSS recorded transactions amounting to US$53.0 million. SADC RTGS During FY2017-18, 4.1 million million 4.1 During FY2017-18, a for cleared cheques were of Rs250 billion. value total 4.0 million During FY2018-19, a for cleared cheques were of Rs252.0 billion. value total • • • • reports drawn MCIB: 382,591 MCIB: 382,591 - COMESA - SADC Port Louis Automated Clearing House: Cheques Regional Border Cross Initiatives the payment systems and worked towards the launch of the launch towards and worked systems the payment on the MauCAS, Switch, Automated Central the Mauritius the successful was achievement Another 2019. August 14 in paper banknote of the and demonetisation withdrawal polymer its substitution of Rs2000 and denomination into enhanced security features design which incorporates the by These initiatives securityusing new technology. efficiency and the promote to contributed Bank have stability Mauritian financial system. of the overall Launch of MauCAS System Mauritius Port Louis Automated Automated Automated Settlement Transfers & Transfers Clearing and Direct Debits Direct Eletronic Fund Fund Eletronic Clearing House: New Rs2000 denomination Polymer Banknote Polymer National Act 2018 Act During FY2017-18, 4.6 During FY2017-18, million transactions were of value a total for cleared billion. Rs117.6 5.4 During FY2018-19, million transactions were of value a total for cleared billion. Rs130.7 During FY2017-18, a total a total During FY2017-18, million number of 1.024 of value a total transactions for settled. Rs3.0 trillion were a During FY2018-19, million 1.2 number of total of value a total transactions for settled. Rs3.0 trillion were Payment Systems Systems Payment Effective 31 January 2019 Effective 31 • • • • The Bank of Mauritius is vested with the responsibility with the responsibility vested of Mauritius is The Bank and settlement the payment and oversee manage to provisions with the accordance of Mauritius in systems To 2004. Act the Bank of Mauritius 5(1)(c) of of Section engaged in is constantly the Bank this objective, attain and settlement its banking aimed at renovating projects technological new implementing capabilities, and supporting to view real-time a with infrastructures During FY2018- economic stakeholders. for payments in bring further to innovation the Bank endeavoured 19, identification of potential risks generated via the generated risks identification of potential and settlement of payment design and operation systems; steps and taking risks assessment of these potential mitigation actions; and develop to with prescribed of compliance ongoing monitoring stage at an early problems aimed at detecting rules, measures. corrective prompt and taking Amidst new technologies and advances in the mode of in the mode and advances technologies Amidstnew subject remain systems payment and settlement, payments the application and require vulnerabilities increasing to the Accordingly, architecture. technical of a resilient the preserve challenges to with faced Bank is constantly in Mauritius and operating systems integrity of payment management framework. risk the attendant improve to along with an upgraded systems of the payment Oversight the inherent monitor to management framework risk thus, of paramount are, infrastructures in payment risks importance. of a strong based on the foundation Hence, 4(1) of with Section and in accordance legal framework a risk-based the Bank has adopted 2018, the NPS Act systems, payment the overall of the oversight to approach the: which comprises • • • in line with the Principles for are These standards the (PFMIs) issued by Infrastructures Financial Market Systems and Settlement on Payment BIS Committee also in conformity with the (CPSS). These principles are Important Systemically Payment for minimum standards that include, inter of risks areas which address Systems liquidity risk, settlement risk, credit risk, alia, operational the Technical by as established legal risk, and risk of Securities Organisation of the International Committee Commissions (IOSCO). is systems of payment digitalisation the rapid In parallel, maintaining to With view a cyber security threats. increasing ecosystem, public confidence in the domestic payment the mandatory and advisorythe Bank has implemented Security Customer the SWIFT by recommended controls standards. in line with international remain to Programme , deposits and withdrawals effected on effected and withdrawals alia, deposits inter As the guardian of public confidence in the rupee as in the of public confidence As the guardian and the safety the Bank views the domestic currency, elements that critical as systems payment efficiency of and financial money transmit enable economic agents to With the aim of and smoothly. securely instruments enhancing and in the financial system mitigating risks the National systems, the efficiency of payment came into 2018) (NPS Act 2018 Act Systems Payment a aims at providing The Act January 2019. effect on 31 oversight the regulation, for framework comprehensive and other and supervision systems of national payment with the Vested in Mauritius. operated systems payment and supervise national the oversee authority regulate, to in operated systems payment and system payment system, and settlement as the clearing Mauritius as well of the and efficient operation a secure the Bank ensures in Mauritius. systems payment One key aspect of the Bank’s central banking services banking central is of the Bank’s aspect One key Mauritius. of Government the to banker as plays it role the Bank the banking services by offered Transactional comprise, the act as agent for to mandated The Bank is also cash sector of public the purpose for government the issuance of debt management. The Bank undertakes Bills, Treasury include Treasury that generally instruments the proceeds Bonds, of Mauritius Government and Notes borrowing the financing of government’s for of which cater through put on tender are These instruments requirements. primary have the Primary dealers whereby System, Dealer bid at auctions of these securities. rights to the exclusive a new Bank introduced the Underarrangement, this bonds Mauritian government for system trading electronic for caters - that Platform E-Bond Trading - the Bloomberg government for secondary of a the development market securities. behalf of various ministries and other departments, ministries and other various behalf of the government’s meet to instructions of payment processing all management and consolidation of obligations, and the on received departmental accounts. Funds government and lines of credit of grants in the form behalf of government maintained and generally also recorded are abroad from accounts government the management of for the Bank by purposes. and bookkeeping

Payment and Settlement Systems and Currency Management 112 Payment and Settlement Systems and Currency Management 113 700 600 500 400 300 200 100 0 4.8 4.6 4.4 4.2 4.0 3.8 Million 2018-19 2018-19 Jul 18 - Jun 19 Jul 18 2017-18 2017-18 Volume of Cheques Volume Jul 17 - Jun 18 Jul 17 Volume (RHS) Volume Volume (RHS) Volume 2016-17 2016-17 Jul 16 - Jun 17 Jul 16 Cheques Cleared Value Value REPSS USD Transactions 2015-16 2015-16 Volume of Cheques and EFTs on BCS of Cheques and EFTs Volume Jul 15 - Jun 16 Jul 15 Volume of EFTs Volume 2014-15 2014-15 Oct 14 - Jun 15 Oct 14 0 10 70 60 50 40 30 20 5.5 5.0 4.5 4.0 3.5 3.0 2.5 2.0 244 246 248 254 252 250 Rs billion USD million Million 5.8 5.4 5.0 4.6 4.2 3.8 3.4 3.0 1,200 1,100 1,000 900 800 700 600 Million Thousand 2018-19 2018-19 2018-19 2017-18 Value of Cheques Value 2017-18 2017-18 Volume (RHS) Volume Volume (RHS) Volume Selected Indicators for Payment Systems and MCIB and Systems Payment for Indicators Selected 2016-17 2016-17 2016-17 Value Value Transactions on MACSS Transactions Electronic Clearing Transactions Electronic 2015-16 2015-16 2015-16 Value of Cheques and EFTs on BCS of Cheques and EFTs Value Value of EFTs Value 2014-15 2014-15 2014-15 Million 0 90 50 80 70 2.4 2.2 2.0 2.8 2.6 3.2 3.0 Rs billion 110 140 120 150 130 100 100 200 300 250 Rs trillion COMESA Regional Payment and Settlement and Settlement RegionalCOMESA Payment System

Regional Cross Border Initiatives Border Regional Cross that demonstrated have economic developments Recent pace. In a very at rapid the African continent is growing as the Continental such agreements trade this context, enhance intra- to contribute would Area Trade Free payment Thus, regional in the coming years. trade regional and trade facilitate to expected are infrastructures system economic promoting thereby of transactions, settlement payment access to improved activity providing in Africa by of terms in efficiency services payment and increasing and cost.speed 1. trade and effective Mauritius as a reputable promote To the African continent, the for platform and investment consolidate to initiatives several on Bank has embarked inter- and increasing facilitating towards our aspirations The Bank had been closely flows. payment regional Clearing House in the setting with the COMESA involved Settlement for these payment instruments are carried out carried are instruments these payment for Settlement daily. cycles four basis over deferred on a net number of 4.0 million cheques a total During FY2018-19, billion, which of Rs251.8 value a total for cleared was but higher terms 4.3 per cent in volume by lower was FY2017-18. to compared terms per cent in value 0.8 by cleared of cheques and value daily volume The average the Over billion, respectively. and Rs1.0 16,136 at stood by dropped of cheques volume the while years, lastfive per 1.4 by increased of cheques per cent, the value 14.8 and cheques high-value of the use to mainly due cent, low-value for mode of payments electronic to the switch transactions. Rs130.7 to amounted cleared of EFTs value The total higher transactions, 5.4 million number of a total billion for and value per cent and 11.1 per cent in volume 17.2 by The volume FY2017-18. to compared respectively, terms, per 72.6 per cent and 52.9 by increased of EFTs and value period, indicating the past 5-year over cent, respectively, payment in the use of electronic a significant increase pertaining payments that to highlighted be to is It modes. have EFTs the MRA through by Income Tax the Negative volume and the in both to the rise significantly contributed of EFTs. value out rolled Debit Scheme that was the Direct to With regard debit of direct value the total the Bank in June 2017, by year of operations during the first cleared transactions cleared transactions 125,109 billion for at Rs2.5 stood principally was Debit system the BCS. The Direct through as well collection as revenue the MRA for used by other and Fund the National Pension contributions for social contributions. per cent in volume terms terms volume in cent per per cent compared to FY2017-18. to compared cent per Cheque clearing positions, direct debit, and low value value low and debit, direct positions, clearing Cheque Clearing of the Port Louis Automated transfers electronic House (PLACH); DepositoryMauritian Scheme (CDS) in Central The and South African sterling Pound euro, US dollar, rupee, rand; the accounts (CNP) to Project The Contribution Network Authority the with (MRA) held Revenue Mauritius the of Bank; and the Card through routed transactions Domestic card transactions payment and instant (CPS) System Payment (IPS). System the Instant Payment through routed The PLACH, which is the single clearing house operating which is the single clearing house operating The PLACH, clearing servicesin Mauritius, offers direct cheques, for (EFT). Transfer Fund Electronic value debit and low Bulk Clearing System (BCS) Bulk Clearing System Throughput, measured in terms of volume and value and value of volume in terms measured Throughput, is an the year, over the MACSS through of transactions During system. of performance of the payment indicator for transactions number of 1,154,764 a total FY2018-19, on MACSS, settled of Rs3.0 trillion were value a total 12.8 of increase an representing to compared terms value in cent per 0.4 of decrease a but smoothly operated that the MACSS It is notable FY2017-18. robust its confirming thereby major disruption, without any The daily transactions. of volume large capacity process to during the period settled of transactions volume average daily value based on an average 4,701, was under review per cent in a rise of 12.7 billion representing of Rs12.4 terms but a decline of 0.2 per cent in value terms volume the reflect developments These FY2017-18. to compared and low-value payments for use of the MACSS increasing processed currencies The amount of foreign settlement. to equivalent was during FY2018-19 on the MACSS 19 up by USD8.7 billion, Throughput on MACSS Throughput • • • • The Mauritius Automated Clearing and Settlement System System Settlement Clearing and Automated The Mauritius system payment value is the single large (MACSS) that system automated is a fully in Mauritius. MACSS time on a real in settlements effect payment to undertakes transactions of value substantial of the In view basis. gross of be to considered is MACSS the basis, daily a on settled importance adhere systemic and its design and operations the CPSS and the by advocated recommendations to incorporates the PFMIs. The MACSS to IOSCO in relation in Mauritian settlement that allows feature a multi-currency African rand South sterling, Pound euro, dollar, US rupee, include of the MACSS features Additional and Swiss franc. of: the daily settlement Mauritius Automated Clearing and Settlement and Settlement Clearing Automated Mauritius System

Payment and Settlement Systems and Currency Management 114 Payment and Settlement Systems and Currency Management 115 Mauritius Credit Information Bureau Information Mauritius Credit which (MCIB), Bureau Information Credit Mauritius The an important the Bank, plays by and operated is owned and lenders gap between in bridging the information role with comprehensive lenders The MCIB provides borrowers. assistin them to indebtedness borrowers’ on information and timely assessment of borrowers’ making informed their repayment worthiness and in determining credit the improve able to are lenders As a result, capacity. quality of their loan portfolios cost at lesser capital and at the benefit rates at lower facilities price their credit may Thus, the MCIB is an effective clients. of their borrower to management and contributes risk sound credit for tool financial stability. safeguard under Section 52 of the Bank The MCIB is established of The rights and obligations 2004. of Mauritius Act governed chain are reporting in the credit stakeholders and Conditions of the and Terms Act of the provisions by In line with the pre-requisites MCIB issued under the Act. the legal and bureau, information a thriving credit for the establishes reporting credit for framework regulatory bureau, information of the credit and obligations rights respectively. subjects, and data and users providers data been established on of the MCIB have The operations The foundation. and enforceable transparent a clear, data, permissible to with regards is transparent bureau as periods as well securitydata retention obligations, data of non-compliance. actions in the event the for allowed framework legislative the Initially, participationexclusively of financial institutions licensed with the Bank in the MCIB and sharing of information by basis. In on a reciprocal effected these institutions was of the extension for allow to amended was 2008, the Act including all institutions offering credit, to coverage MCIB’s and utility companies and hire-purchase leasing facilities to allowed the Bank was in Mauritius. In 2013, operating enforcement agencies and law impart public sector to data of their functions assist them in the discharge agencies to and Conditions and Terms The Act and responsibilities. the type to of data with respect the provisions incorporate the implementation of both initiatives. These initiatives These initiatives initiatives. of both the implementation to flows African payment inter-regional aim at enabling up of a including the setting investment, and trade facilitate payment all for catering infrastructure settlement payment SADC in the payments retail value and including low flows, include, Force Task of the of Reference The Terms region. current identify of a study (a) the conduct to among others, models system payment inter-regional future potential and and payments; Pan-African, enable that would cross-border additional regional form of the need to (b) an assessment or Pan-African institutions associations and to payments efforts.support mobile integration Association of African Central Banks Association of African Central SADC RTGS (Formerly known as SADC as SADC known (Formerly RTGS SADC Settlement Regional Electronic Integrated System) During the Assembly of the Association of African of Association the of Assembly the During Governors 2018, held in August Banks (AACB) Central over discussions participatingof re-opened countries back-to- Two integration. system payment inter-regional explore to in April 2019 conducted were back workshops system payment of (i) an inter-regional the development inter-regional an integrated and (ii) framework integration recommended These workshops strategy. mobile payment Payments of the African Inter-Regional the setting-up overseeing of mandate the with Force Task Integration 3. The total number of transactions settled on SADC RTGS RTGS on SADC settled number of transactions The total of ZAR5.83 a value representing is 1,441,006, date to billion/EUR354.36 billion). trillion (USD395.16 Four banks from Mauritius participate in SADC RTGS, Mauritius participate RTGS, in SADC banks from Four Bank Standard Bank (Mauritius) Limited, namely Barclays Bank (Mauritius) Chartered Standard (Mauritius) Limited, Bank Ltd. and the Mauritius Commercial Limited 2. RTGS), (SADC Settlement Time Real Gross The SADC settlement cross-border SIRESS, is a regional formerly It is since July 2013. that has been in operation system which settles system, settlement interbank an automated participating obligations between banks either payment RTGS SADC Currently, basis. delayed or on a real-time in of participating payments banks cross-border settles the process However, (ZAR) only. in South African rand additional currency of including the US dollar as an include to also considerations are There is underway. Participants include future. the in currencies additional financial institutions banks and i.e. banks and central central the by authorised are that SADC in non-banks member countries are bank in the country of origin. 14 number of and the total participating RTGS in SADC participating banks) is 81. central banks (including up of the Regional Payment and Settlement System System and Settlement Payment Regional up of the in intra-trade promoting of objective the overall with as the has been acting The Bank region. the COMESA and Payment Regional of the COMESA bank settlement is and 2012 (REPSS) since October System Settlement 9 for transactions of settlement the in involved currently the on participating banks in US dollar and euro central the cost. During FY2018-19, a lower and at same day the REPSS in US dollar on settled of transactions value while FY2017-18, from US$53.0 million, almost doubled to 33.0 per cent. The by rose of transactions the volume flows of payment and volume the value in both uptrend intra-regional promote to of REPSS the potential indicates and payments. trade Jun May per cent cent per FY2019 Apr per cent from from cent per Mar FY2018 Feb Jan FY2017 Dec Nov FY2016 Oct inter alia, types and inter of services provided Sep FY2015 Aug Jul ‘000 The increase in the number of reports drawn was, to some some to was, drawn in the number of reports The increase facilities credit in the number of new reflected extent, cards credit of loans, overdrafts, in respect reported per cent from 7.1 by up went and finance leases which During in FY2018-19. 145,396 to in FY2017-18 135,646 facilities the number of these new year, the preceding was increase 2.3 per cent. The overall by contracted individuals and firms by loans contracted mainly by driven to access formal credit outside established lending established outside credit formal access to from rose entities The number of reported relationships. (which include 920,224 to 2018 as at end-June 884,571 In parallel, 2019. as at end-June individuals) 857,665 18.4 by increased records of number the 4,562,122. 3,853,065 to Survey 2019 Bank Doing Business the World to According in of the MCIB the coverage 2018, published in October 100 represented entities of number of terms performancea Such population. Mauritian adult the of per of 14.5 with an average most favourably compares countries African the Sub-Saharan by cent achieved of the coverage higher than comparatively and is even The high-income economies. OECD 82.0 per cent for of Bank Doing Business Survey uses the depth World which is based on 8 indicators index information credit comprising, type of the by of participants, the ranking for coverage The MCIB bureaus. information of credit effectiveness an average to of 7 out of 8 compared a score achieved the 6.7 for and African countries Sub-Saharan 3.3 for of high-income jurisdictions. OECD Consultation of the MCIB Database requires and Conditions Section 5.0 of the MCIB Terms all participants prior to consult the MCIB database to During facilities. credit or renewing increasing approving, a recorded drawn the number of reports FY2018-19, up from to 381,591, 15.7 per cent of significant increase (Chart 5.2). in FY2017-18 329,904 Chart 5.2: Number of Reports on the MCIB Drawn 40 35 30 25 20 2019 2019

6 ONFCs

9 4 Utility Leasing Companies Companies

46 Current Current Participants

1 17 Banks Commercial Commercial Microfinance 9 Insurance Insurance Companies to introduce operators to a new type a new of lending activity, to operators introduce to Under in the MCIB. this type of namely the crowdlending, collateral, with lenders provide do not borrowers activity, a plays the MCIB, therefore, from drawn and information them allowing by on the platform borrowers for role vital collateral” history “reputational a as credit their utilise to 52 of the Bank of Mauritius Act 2004 was amended amended was 2004 Section 52 of the Bank of Mauritius Act Act Provisions) (Miscellaneous Finance the by Chart 5.1: Number Participants of Current in the MCIB Chart 5.1: With a view to maximising the utilisation of the MCIB, MCIB, the of utilisation the maximising to Withview a its effort constant the Bank has undertaken broaden to of sector of number and operating in terms coverage participants entities. as the number of reported as well with In December 2005, the MCIB started its operations its participation base comprises banks. Currently, eleven to on loans granted information the Bank which provides its staff participants and 46 other (Chart 5.1). The MCIB has been designed such that its functions designed such that its functions The MCIB has been accessible on-line on a 24/7 and is fully automated are accessed that is system a web-based basis. The MCIB is Participants network. secured a participants by through format file pre-defined a in electronically data their feed Currently, the MCIB database. access to online and have in retrieved be may database the from information to the system Bank is reviewing The only. PDF format align the MCIB service to in XML format data provide processing. with participants’ of their credit automation web an access through Alongside, the Bank is developing efficiency in the system. bring more API to collected by MCIB, use of the data, the retention period period the retention use of the data, MCIB, by collected is shared collected data under which and conditions Data as the institutions. The Bank is registered with other Office, in Processing MCIB with the Data of the Controller Protection of the Data requirements with the accordance and subjects of the rights of data protection ensure to Act stakeholder. any by of misuse of data prevention

Payment and Settlement Systems and Currency Management 116 Payment and Settlement Systems and Currency Management 117 9 8 7 1 1 1 - - - 8 6 7 Y201 Y201 Y201 F F F s n a o L s d s r t f a a C r

Firms t i d 0 0 0 0 0 0 d er 0 0 0 e 0 0 v r 5 5 0 5 0 , , , , , O C 2 0 2 7 5 1 1 e c es s n a ea n Increased competition in the payment field with the in the payment competition Increased such as FinTechs; entry operators of non-traditional transactions; and settlement cost of payment Reduced discount rates; merchant Lower services; payment of innovative Emergence touchpoints; and payment in electronic Diversification bank any to transfer account to account 24/7 Instant in Mauritius. L i F Currency Management Currency an ensure to legally required Mauritius is Bank of The the meet and coins to supply of banknotes adequate of the public in Mauritius. Specifically, demand of members and availability the both ensure (a) to required is Bank the banks; and coins to supply of good quality banknotes banks; and coins from deposits of banknotes (b) accept and (d) of soiled banknotes; the destruction to (c) attend banknotes. soiled and mutilated exchange and Coins Issue of Notes non-cash driven the use of technology Notwithstanding and coins banknotes the demand for modes of payment, and banknotes of value The in FY2018-19. increased individuals went up by 23.6 per cent and 37.5 per cent, per and 37.5 cent per 23.6 by up went individuals credit Chartnew of a comparison 5.3 gives respectively. participants MCIB by year during the approved facilities type. type borrower and credit by under review In addition to providing a platform for the development of development the for a platform providing In addition to channels, MauCAS payment and convenient ubiquitous public: to the general benefits will bring the following • • • • • • 9 8 7 1 1 1 - - - 6 8 7 s n Y201 Y201 Y201 a F F F o L s d r a C

t i d e 0 0 0 0 0 0 r s 0 0 0 0 0 t C f Individuals 0 0 0 0 0 , , , , , a r 0 0 0 0 0 d 6 8 4 2 0 1 er v O 2011, the Bank achieved another landmark landmark another the Bank achieved 2011, e c es s n a ea n L i F The Card Payment System (CPS), which processes (CPS), which processes System Payment The Card and payments; all domestic card and settles (IPS), which leverages System The Instant Payment retail allow bank accounts to access to on direct of the channel used. irrespective payments • • As a core contributor to national payment system system national payment to contributor As a core aiming projects several initiated the Bank development, of payment and resiliency interoperability the improve to in Mauritius. Afterof the implementation infrastructures settlement gross time real a notably systems, major two cheque for in 2000 and a bulk clearing system system fund of low-value and settlement truncation electronic in transfers the digitalisation for the way pave to is expected MauCAS It will channel all in-country electronic of the economy. basis time on a 24/7 in real/near-real transactions payment institutions holding them to point and route a central to of use switches to accounts without the need payers’ thereby will be made locally, Settlement global providers. has two costs. MauCAS and transaction routing reducing components: Mauritius Central Automated Switch Switch Automated Mauritius Central (MauCAS) with the launching of the 2019 August on 14 milestone the MauCAS. Switch, Automated Mauritius Central Chart Facilities 5.3: Credit and finance leases availed of by individuals. The number The number by individuals. of availed leases and finance has individuals of by availed facilities card credit of new years the past four over trend a downward maintained in FY2018-19, 18,988 to in FY2015-16 33,051 from and firms by loans contracted number of new while the Rs2000 - 1.9% Rs25 - 13.8% Rs50 - 10.1% - 21.4% Rs100 Rs200 - 11.9% Rs500 - 11.9% - 29.0% Rs1000 Volume of Banknotes in circulation of Banknotes Volume Sale of Dodo Gold Coins the Bank in by issued are carats 22 of coins Gold Dodo ounce with a one denominations, namely, different four of value half an ounce with a face of Rs1,000, value face Rs250 of value quarterRs500, face a with ounce an of of Rs100. value of an ounce with a face and one-tenth stated the value in Mauritius for legal tender The coins are at the counter on sale The Dodo Gold coins are thereon. of the Bank of Mauritius and banks in Mauritius. The daily selling price of the coins, based on their gold content in the posted price, are gold market and on international Banking Hall and on its website. Bank’s financial year. Banknotes of Rs1000 denomination denomination of Rs1000 Banknotes year. financial of value cent of the total 66 per nearly for accounted of Rs500 banknotes by followed in circulation, banknotes cent of the per 13.5 which represented denomination, banknotes terms, volume In banknotes. all of value total 29.0 per cent of denomination represented of Rs1000 of banknotes by followed in circulation, banknotes all per cent. Chart of 21.4 with a share denomination, Rs100 in of banknotes and volume value 5.4 depicts the total total the FY2018-19, During denomination. by circulation 7.0 by increased of coins in circulation and volume value cent, respectively. per cent and 4.6 per Rs25 - 0.8% Rs50 - 1.2% - 4.8% Rs100 Rs200 - 5.4% Rs500 - 13.5% - 65.9% Rs1000 Rs2000 - 8.4% Value of Banknotes in circulation of Banknotes Value The Bank imports and sells gold of high quality, that is, 24 that is, 24 The Bank imports and sells gold of high quality, 500 grams grams, of 1000 in bar forms 999.9 assay carats industrialists to forms as in grain as well grams and 100 The selling price of industrial gold and licensed jewellers. gold international based on prevailing are and gold bars Banking daily in the Bank’s posted and are prices market Hall and on its website. Sale of Gold to Licensed Jewellers Sale of Gold to Chart at 30 June 2019 as in Circulation 5.4: Banknotes In FY2018-19, the value of banknotes in circulation rose by by rose circulation in of banknotes the value In FY2018-19, while cent in FY2017-18, 0.6 per to 6.9 per cent, compared compared 6.0 per cent by rose of banknotes the volume during the previous per cent of 2.1 an increase to coins deposited at and issued by the Bank, during the the Bank, during by at and issued coins deposited billion and Rs41.5 Rs39.1 to amounted review, under year million 55.5 Bank examined The billion, respectively. billion, of an amount of Rs29.1 to equivalent banknotes, unfit be to found billion were amount of Rs6.0 which an per cent of 94 nearly As at 30 June 2019, circulation. for Rs5.8 billion, were to amounting the soiled banknotes, destroyed.

Payment and Settlement Systems and Currency Management 118 Payment and Settlement Systems and Currency Management 119 Anniversary: Anniversary Commemorative th th Rs1500 denomination Gold coin Rs1500 coin denomination Gold Rs1000 coin Rs200 denomination Silver of the commemorative The design on the obverse edition coin and the special denomination Gold Rs1000 denomination Gold Coin depicts Rs1500 commemorative Building of Headquarters of the New façade the front on the obverse the Bank of Mauritius, while the design coin Silver denomination Rs200 commemorative the of of the Old Building of the Bank façade the front shows of the three reverse of Mauritius. The design on the surrounded Dodo bird coins depicts a commemorative The selling price 1967-2017.” “BANK OF MAURITIUS by based on the coins is computed of the commemorative prices. Exchange London Metal Programme Clean Banknote Programme, its Clean Banknote The Bank maintained in campaign the revamped and 2010 April in launched the overall improve aims to This programme June 2014. in Mauritius. in circulation quality of banknotes Banknotes Polymer in banknotes polymer introduced has Bank The denominations of Rs25, Rs50 and Rs500 since August circulation the Bank put into In December 2018, 2013. is which denomination, Rs2000 of banknotes polymer The Rs2000 of the Rs2000 paper banknote. an upgrade has almost the same design as the polymer banknote enhanced security features with, however, paper banknote are banknotes Polymer security new using technology. Coin coins, in proof commemorative The Bank issued three its 50 mark condition, to in proof condition was issued in November 2010. The 2010. in November issued was condition in proof Ghat, with the Aapravasi depicts the obverse design on platinum The third underneath. “Rs1200” the inscription in proof denomination Rs1200 coin of commemorative design on The December 2011. issued in was condition inscription with the Brabant depicts Le Morne the obverse of on the reverse The design underneath. “Rs1200” an effigy of Sir Seewoosagur coins bears the three of Mauritius. Prime Minister Ramgoolam, the first 50 Bank of Mauritius

wedding anniversary wedding of anniversary of the th th A silver commemorative commemorative A silver coin of Rs20 denomination in 1998 May issued in was the mark condition to proof 50 Queen Elizabeth II and Prince II and Queen Elizabeth Philip. The selling price of the case coin in a presentation of equivalent the rupee is GBP26. A silver commemorative commemorative A silver coin of Rs25 denomination the mark issued to was 10 independence of Mauritius. independence of of the coin The selling price is Rs700. AnniversaryIndependence of Mauritius of the th 10 The Bank offers for sale several commemorative coins as coins commemorative sale several for offers The Bank of the members to at the counters as platinum coins well public. Sale of Commemorative Coins Sale of Commemorative 1997 Golden Wedding Collector Coin Collector Golden Wedding 1997 The first platinum commemorative coin of Rs1500 coin of Rs1500 platinum commemorative The first issued in October condition was denomination in proof at House, State depicts the 2009. The design on the obverse These underneath. of “Rs1500” Réduit with the inscription denomination coin of Rs1200 second commemorative The Bank sells a complete set of the unique, exclusive exclusive of the unique, set The Bank sells a complete Platinum Coin collection of the three and prestigious and in 2009, 2010 condition released Series in proof in issued coins were These box. in a presentation 2011 tribute pay of the Nation’ Platinum Series to the ‘Father the foundation in laying Ramgoolam Sir Seewoosagur to of the Mauritian nation. The selling price of each stone daily based on the London platinum coin is computed also Fixing. These coins are P.M Exchange-Euro Metal cases with a individual presentation in separate available certificate of authenticity. ‘Father of the Nation’ Platinum Coin Series ‘Father

Coin Deposit CampaignCoin Deposit the Bank in July launched by Deposit Campaign, The Coin the Campaign of The objective underway. remained 2012, excess deposit to public the of members encourage to is them exchange banks or to their possession with coins in of the Bank of Mauritius. at the banking counter CampaignPublic Sensitisation on Security Features of Banknotes Bank the programme, partAs literacy financial its of Our “Know a leaflet 2018, 03 March issued as from security all features which incorporated Banknotes”, in currently polymer, and paper both banknotes, the of been distributed have leaflets The informative circulation. the island, including all media partners. In addition, across the Bank of Mauritius Museum have to visitors 17,000 over of and a copy security features on banknote been briefed to them. has been handed leaflet the informative 7.5 6.1 1.4 8.2 Volume Volume (million banknotes) 305.3 205.2 Value Value 2,914.8 3,733.7 (Rs million) Rs50 Rs500 Rs25 Rs2000 Denomination As from 05 December 2018, following the issue of the the issue following 05 December 2018, As from the Bank banknote, denomination polymer Rs2000 paper Rs2000 the circulation from withdraw to began of the public were Members denomination banknote. Rs2000 denomination paper exchange advised to in their possession againstRs2000 polymer the banknotes until thereof, bank or branch commercial at any banknotes ceased to The Rs2000 paper banknote January 2019. 31 The Rs2000 February 2019. 01 as from be legal tender February afteron or 01 still in circulation banknotes, paper of only at the banking counter be exchanged may 2019, the Bank of Mauritius. - Pa of the Rs2000 and Demonetisation Withdrawal Family 1999 of the per Banknote Table 5.1: Value and Volume of Polymer Banknotes Banknotes of Polymer and Volume Value 5.1: Table as at end-June 2019 in Circulation cleaner and more durable, in addition to containing containing to in addition durable, more and cleaner of volume and The value securityenhanced features. are 2019 end-June at as circulation in banknotes polymer 5.1. in Table shown

Payment and Settlement Systems and Currency Management 120 Regional Cooperation and International Affiliation 6 Affiliation and International and International Regional Cooperation Regional Cooperation Piastre Decaen

The Piastre Decaen was named after the French Governor of the Ile De France, Charles Decaen after he commissioned a local engraver and jeweller, Aveline, to design a coin in 1810. The Piastre, which bore the value of 10 Livres, was minted from silver ore found on board the ‘Ovidor’, a Portuguese ship captured by Lieutenant de Vaisseau Pierre Bouvet in the Straits of Malacca on 20 October 1809. It was also used by the British after they took possession of Mauritius in December 1810. Regional Cooperation and International Affiliation 123 for the period 2018-19, while Bank of Tanzania while Bank of Tanzania 2018-19, the period for “Financial Technology Innovations, Cybercrime: Cybercrime: Innovations, “Financial Technology “Declining correspondent banking relationships relationships banking “Declining correspondent Ordinary of Governors, of the Assembly Meeting st 9 August 2018, Sharm El Sheikh, Egypt El Sheikh, Sharm 9 August 2018, was Governors of Assembly the of OrdinaryThe Meeting the Governor by chaired and was 2018 held on 9 August discussions of the South African Reserve Bank. Extensive and the criteria held on the AMCP convergence were countries, member by adopted methodology computation met countries out of 52 and participants that 18 noted to compared in 2017, criteria the primary convergence the African made by was A presentation none in 2016. Union Commission Commissioner on the establishment Bank. The Assembly of Governors of the African Central the Community of African Banking Supervisors requested identify solutions and the issue of de-risking examine to members that AACB agreed the continent. It was for of Understanding Memorandum sign a multilateral would the account after into taking information-sharing, for of took note of each jurisdiction. Governors specificities to 14 Seminar held from conclusions of the Continental of Chad, on the in N’Djamena, Republic 2018 May 16 theme made was Banks”, and a proposal Central Challenges for to in Fintech developments monitor banks to central for its benefits and risks. understand better on the was 2018 held on 8 August The Symposium theme for challenges policy and risks flows: capital illicit and of African role the pivotal considered Africa”. Governors flows, banks in the fight against illicit financial central banks, for among central coordination and the need for capacity-building legal and institutional and a stronger The hosting of an illicit flows. fight these to framework in Forum African AACB - ServiceOfficial Sector Providers cash management and securities on focusing June 2019, approved Governors also noted. accounts, was custody Bank Central the European by proposed the programme It with the AACB. of collaboration areas on potential with the works Secretariat that the AACB proposed was under the be conducted to define the activities to ECB Governors and representatives from central banks of central from and representatives Governors Seychelles, Rwanda, Mauritius, Kenya, Comoros, Burundi, on the held were Uganda. Discussions and Tanzania in the light 2017 for of the AMCP implementation status of and criteria convergence macroeconomic revised the of definitions in line with best international on harmonizing the Federal by delivered was A presentation practices. on a proposed (FRBNY) Reserve York Bank of New Further, relations. enhanced FRBNY-AACB for roadmap 2018 the for proposed themes the considered governors Seminar. Continental and the 2019 Symposium AACB the Bank from over took des Comores Centrale Banque Africa incoming Chair of the Eastern of Mauritius as the Sub-region Vice-Chair. as the new appointed was 41 Governing Board and the Board Governing th Ordinary Meeting of the Eastern Ordinary of the Eastern Meeting th meeting of the FSB RCG for Sub-Saharan Sub-Saharan for of the FSB RCG meeting th Ordinary Africa Sub- of the Eastern Meeting th General Assembly meeting in July 2018. Following the Following in July 2018. meeting Assembly General th 9 Africa during which discussions were mainly focused on mainly focused Africa during which discussions were in and financial vulnerabilities of RCGs the effectiveness of capacityhis In Governor the Chairman, as region. the the 18 the Bank hosted This chapter provides an overview of key policy of key an overview provides This chapter in which the Bank fora issues discussed at the various valuable gained representatives participated. The Bank’s scaling up their countries are other how insights into the use of resilience, promoting financial and economic gearing up and including Fintech, technologies emerging cyber risks. challenges posed by face to resignation of the Acting Chief Executive Officer of the Chief Executive of the Acting resignation the of meeting extraordinary an hosted Bank the IILM, as Full In its role 2018. in September Board Governing meetings the Bank participated at the regular Member, the IFSB. held by 18 Association of African Central Banks Association of African Central Macroeconomic convergence still ranks high on the still ranks convergence Macroeconomic Efforts blocs. economic increasingly regional of are agenda the and criteria convergence the refining on focused to ones continental the to targets regional of alignment African Monetary the African Union’s meet Cooperation to committed The Bank remains (AMCP). Programme a under review, During the year integration. regional in exercise a peer review Namibia conducted mission from macroeconomic SADC for Mauritius, based on the criteria Continental the AACB The Bank hosted convergence. it also and during the same month, 2019 Seminar in May the 15 hosted During FY2018-19, the Bank remained active on the active Bank remained the During FY2018-19, It participated in fronts. international and regional Banks of African Central the Association of meetings Southern and Eastern for Market the Common (AACB), Development African the Southern Africa (COMESA), Financial Consumer Community the International (SADC), and the Financial (FinCoNet) Organisation Protection (RCG) Group Stability Consultative (FSB) Regional Board Africa. Sub-Saharan for On 13 July 2018, the Governor hosted and chaired the and chaired hosted the Governor July 2018, On 13 Africa Sub-region. of the Eastern Meeting Governors’ Deputy Governors, by attended was meeting The region of the AACB, 13 July 2018, Mauritius July 2018, 13 of the AACB, region The global Islamic finance market has continued to gain has continued The global Islamic finance market of meetings several momentum and the Bank attended Islamic Liquidity Management (IILM) the International and the Islamic Financial ServicesIn this (IFSB). Board of the IILM, Board of the Governing as Chairman context, the 20 hosted the Governor Africa Sub-region of the AACB in July 2018. 2018. in July AACB of the Africa Sub-region Meeting, Meeting, th Meeting of the COMESA Committee on Statistical Committee COMESA of the Meeting th Common Market for Eastern and Southern and Southern Eastern for Common Market Africa of State Summit of Heads COMESA and Government Zambia Lusaka, 2018, July 18-19 Council meeting, and of Heads of State Summit The COMESA of the re-admission Council approved Government admission of Somalia and the Republic the Federal the cost- Council noted The of Tunisia. of the Republic and Payment Electronic of the Regional effectiveness all transactions that nearly and the fact System Settlement In line of credit. letters had been without out so far carried Secretary the Project, Area Trade Free with the Digital possibility the of explore would of COMESA General The within the REPSS platform. blockchain having Monetary COMESA the commended Council for Institute capacity-buildingorganising that the activities, and noted majority face continued to member countries of COMESA in I (2005-10) stage set targets the difficulties in meeting were criteria definitions of the convergence as different being applied. 9 the COMESA Secretariat assisted member countries in assisted Secretariat the COMESA statistics in investment direct of foreign the compilation In this recommendations. with international accordance on Statistical of the Committee mandate the core context, first in the made progress review to was (CSM) Matters Statistics of the COMESA of the implementation year focus to urged was Secretariat The COMESA Strategy. the lead take and to on COMSTAT, its statistical products in areas technologies and emerging new in exploring and that could enhance the compilation such as big data Cross- the new of statistics. The CSM welcomed analysis initiative Secretariat’s the and noted Initiative Trade Border further to with a view improving a programme up in setting Plan Statistics Work The draftthe quality data. 2019 of trade acknowledged latter the and CSM the to presented was its national the on-going efforts develop in Somalia to member states COMESA statistics and engage with other as required. Matters, 7-9 November 2018, Lusaka, Zambia Lusaka, 2018, 7-9 November Matters, by StatisticsStrategy of the 2017-20 approval Following at its 37 Council of Ministers the COMESA which no country met. Governors agreed that greater greater that agreed country which no Governors met. budget status of AACB on the visibility required was contributions. Ordinary meeting held on 9 on held Ordinary meeting st Ordinary of the Eastern of Governors Meeting th 19 Around 70 delegates from 24 member central banks member central 24 from 70 delegates Around institutions participated international and regional 12 and the Bank on the theme by in the seminar hosted Some Implications Tendencies: Protectionist “Renewed broad . The three in Africa” Policy Macroeconomic for banks and the of central (a) the role sub-themes were: intra-African in promoting Area Trade Free Continental on external of protectionism (b) the implications trade; trends performance in Africa; and (c) protectionist sector monetary for integration and prospects the world around participantsin Africa. In the light of deliberations, identified on African countries effects of protectionism the adverse to a common strategy adopt to the need and considered and supportboost competition their export industries. such as the Belt and developments infrastructure Key debt rising sovereign and the related Initiative Road the welcomed also on the agenda. Governors were levels Area Trade Free of the African Continental implementation between relations enhance trade to expected that was partners.Africa and its trading AACB Continental Seminar, 6-8 May 2019, 2019, 6-8 May Continental Seminar, AACB Mauritius Balaclava, August 2018 in Sharm El Sheikh, Egypt. Information was was Information El Sheikh, Egypt. Sharm in 2018 August of the AUC- implementation on the the AUC by provided of the African the establishment for Joint Strategy AACB Communitythe of of Groups Working The Bank. Central examine to mandated African Banking Supervisors were banks of member central initiatives and experiences the and cybersecurity. on Fintech The Ordinary Meeting of the Bureau of the AACB was was of the AACB of the Bureau The Ordinary Meeting banks and representatives member central 11 by attended Bank Central the of Governor the by chaired and AUC the of of held on the implementation Discussions were of Egypt. 41 the at taken decisions the Ordinary Meeting of the Bureau of the AACB, 13 13 Ordinary of the AACB, of the Bureau Meeting Senegal Dakar, 2019, March collaboration programme, for consideration at the next at the next consideration for programme, collaboration 2019. March scheduled for meeting Bureau The Ordinary Meeting of Governors of the Eastern Africa of the Eastern of Governors The Ordinary Meeting and June 2019, held on 13 was of the AACB Sub-region developments on economic briefed were governors and in 2018 fronts and international on the regional that the economic noted They 2019. the outlook for was in 2018 Africa Sub-region performance of the Eastern Sub-Saharan for the average above sustained and broadly all the met on average, Africa. Countries in the region, criterion revenue the tax for except criteria, convergence Africa Sub-region of the AACB, 13 June 2019, June 2019, 13 of the AACB, Africa Sub-region Comoros Moroni,

Regional Cooperation and International Affiliation 124 Regional Cooperation and International Affiliation 125 “Integrated paper on Recent Economic Recent paper on “Integrated “Promoting Infrastructure Development and Development Infrastructure “Promoting SADC Summit of Heads of State and Government, Stateof Heads of Government, Summit and SADC Meeting of the SADC Committee of Central Bank Central of Committee SADC the of Meeting th th 17-18 August 2018, Windhoek, Namibia August 2018, 17-18 and Government of Heads of State Summit The SADC endorsed as the Development” Sustainable for Empowerment Youth in the implementation Summit theme. Progress 2018-2019 Development Strategic Indicative Regional of the Revised along with the noted, was 2015-2020 Plan (RISDP) and IndustrializationStrategy SADC the of implementation the SADC Summit reviewed The 2015-2063. Roadmap were economic performance and member states regional their economies, scale up efforts diversify to to urged mechanisms and collection domestic revenue improve manage public expenditures. 47 Maseru, 2018, 5-7 September (CCBG), Governors Lesotho the CCBG approved 2018, in September its meeting At Strategic for success of measures amended some on country including a report performance 1, Area Focus and how criteria convergence against macroeconomic the highlighted Governors shortfalls could be addressed. statistics within the quality macroeconomic have need to across comparison ensure banks, to of central mandate support to macroeconomic research and states member of the cognizance took Governors convergence. on the presentation and fiscal deficit in SADC”. Inflation trends Developments member states pose challenges for positions continue to the progress reviewed Governors the medium term. over on the activities of the CCBG Subcommittees reports of the SADC reports of individual progress note and took Stock of SADC Banking Association and Committee Exchanges. Macroeconomic of the SADC Meeting South Pretoria, 6-7 December 2018, Subcommittee, Africa the performance reviewed The Subcommittee against the SADC 2018 of member countries for the past six For targets. convergence macroeconomic in the region. down has slowed economic growth years, on financial and has had an impact This development by high non-performing loans as indicated fiscal sectors, Subcommittee to meet twice a year. The April meeting The April meeting twice a year. meet to Subcommittee while the November reports, review consider peer would the Committee by papers consider research would meeting wider issues pertaining to Bank Governors, of Central Mission Teams. Review of Peer preparation and SADC and in 2020-21 Tanzania review peer Mauritius would Mauritius in 2021-22. peer review would Zimbabwe 38 Meeting of the Bureau of the COMESA of the COMESA of the Bureau Meeting th The Panel approved the means of measurement for the third the third for of measurement the means approved The Panel namely indicators, convergence of macroeconomic set and supervisory of regulatory the harmonisation systems, systems financial inclusion and linking individual payment that Madagascar, It noted systems. payment with regional be peer reviewed would and Malawi Lesotho Seychelles, of the Congo, Republic the Democratic by in 2018-19 Panel The respectively. Botswana and Zambia Eswatini, Botswana, for reports the mission review considered in Zambia, and Africa South Mozambique, Mauritius, medium- economic developments, particular recent and achieve policies to prospects, macroeconomic term monitor matrices to and targets, sustain macroeconomic reviewing by recommendations of implementation round of the peer first the from Lessons learnt teams. develop including the need to highlighted, were reviews performance more compare to templates standardised SADC Macroeconomic for was given Approval efficiently. The SADC Macroeconomic Convergence Peer Review Review Peer Convergence Macroeconomic The SADC macroeconomic assessed, amongst others, Panel panel The surveillanceand region. the in monitoring namely member states only three that in 2017 noted the primary had met and Tanzania, Lesotho Botswana, pertaining inflation, fiscal indicators to convergence had met member deficit and public debt, while no state namely indicators secondary three the all convergence The account balance and import cover. current growth, encourage Council to the SADC recommended Panel policies to and implement formulate to member states of their economies against the vulnerabilities address economic growth. shocks undermining Southern African Development Community African Development Southern Review Peer Convergence Macroeconomic SADC South Africa Johannesburg, July 2018, 9-11 Panel, 39 The meeting of the Bureau of the COMESA Committee of Committee of the COMESA of the Bureau The meeting banks of central Governors by attended was Governors The and Zimbabwe. Burundi Egypt, of Djibouti, Sudan, activities made on the REPSS and progress noted Bureau Member House. Clearing COMESA the by out carried conduct sensitisation to urged banks were central the market to banks with their commercial workshops started of Tunisia Bank The Central use of the REPSS. the CCH and the REPSS, to of admission the process interest had expressed Bank of Somalia and the Central the proposed considered Bureau in joining same. The criteria convergence macroeconomic COMESA revised Monetary the COMESA implementing stages for and new in line with the AMCP. Programme, Integration Committee of Governors of Central Banks, 4 Banks, of Central of Governors Committee Djibouti, Djibouti 2018, December meeting was hosted by the by hosted was meeting th Governing Board (GB) and the Board Governing th meeting was held from 2 to 3 May 2019 and was and was 2019 3 May 2 to held from was meeting th General Assembly (GA) meetings of the IILM on 10 (GA) Assembly of the IILM on 10 meetings General th 9 hosted by the Bank. Members were briefed on the FSB’s on the FSB’s briefed were the Bank. Members by hosted that needed to and vulnerabilities 2018-19 priorities for to discuss was held session A specific be addressed. a report prepare to fragmentation market issues around G20 at the June 2019 consideration for on the topic meeting Bank Governors and Central Finance Ministers also discussed the possible Japan. Members in Fukuoka, Successive of RCGs. the effectiveness enhance to steps in financial vulnerabilities to dedicated sessions were Sub- by faced challenges the world, the and region the Basel the implementing in African economies Saharan in and the application of cloud technologies framework the financial sector. July 2018, which were attended by nine GB members and nine GB members by attended which were July 2018, Islamic institutions. The Governor of key representatives of the GB and the GA, the meetings of the Bank chaired Committee Executive the Board by preceded which were the updates GB noted The held on 8 July 2018. meeting Committee, Executive of the Board the Chairmen from Management Risk Board Committee, Audit Board and the Compensation Sharī‘ah Committee Committee, the IILM The GB approved Committee. and Remuneration IILM projects, for Plan and the roadmap Business 3-year amongst others. of the meeting an Extraordinary The Bank hosted following 2018 September (EGB) on 10 Board Governing Officer (CEO) Chief Executive of the Acting the resignation the resignation The GB approved one month earlier. mostthe senior appointed and CEO Acting the of with effect CEO, Acting as the new Director Executive pending the appointment of the 2018, September 15 from CEO. substantive INTERNATIONAL ISLAMIC LIQUIDITY INTERNATIONAL MANAGEMENT the 20 The Bank hosted South African Reserve Bank and two new members, members, ReserveSouth African new two Bank and joined in Bank of Zambia, of Uganda and namely Bank on an update provided the RCG. FSB Secretariat The of Over-The-Counter reforms including activities, FSB’s the ending of financing and infrastructure derivatives, Enterprises Fail” and Small and Medium-sized Big to “Too Participants others. financial discussed financing, among the level levels, at the global and regional vulnerabilities afteryears the Global Financial ten resilience of financial for cyber risks flows, capital to relating Crisis, the risks well as the opportunitiesfinancial institutions as and risks global that Participants noted and SupTech. RegTech of accommodative of an spite tight in were financial conditions monetary countries. in many policy stance The 15 2019, respectively. The 14 respectively. 2019, meetings of the FSB RCG for Sub- for of the FSB RCG meetings th and 15 th Meeting of the Committee of Central Bank of Central the Committee of Meeting “Primary Dealer System: the Case of SADC” and “Primary Dealer System: th The 14 FINANCIAL STABILITY BOARD REGIONAL BOARD FINANCIAL STABILITY SUB-SAHARAN GROUP FOR CONSULTATIVE AFRICA 48 and widening fiscal deficit. The Subcommittee highlighted highlighted The Subcommittee fiscal deficit. and widening to create economic diversification up speed to the need of member countries The status growth. for sectors new recommendations of the the implementation regarding The also discussed. was teams review peer made by the peer align need to the underlined Subcommittee agenda. A integration with the SADC process review round of made on the assessment of the first presentation a to given was and consideration process the peer review convergence. monitoring to holistic approach more “External debt on “External the Reserve Bank of Zimbabwe by monetary for policy in the dynamics and implications the paper on that approved . Governors SADC Region” at the forthcoming debt dynamics be presented external of Minister Committee and the SADC Symposium AACB in The feasibility of investing of Finance and Investment. African Domestic Bond Bank’s the African Development discussed. was Funds Bond BRICS and Asian the Fund, of the status of adherence that an analysis noted Governors banks each member central by standards international to also took They the CCBG annually. to be provided would Management Crisis SADC the on report a progress of note for which provides Workshop, and Bank Resolution banks manage actions that could assist central potential financial instability. crises and could reduce cross-border The Governors also took note of findings of the research research of findings of the note also took The Governors Bank of Seychelles the Central by prepared papers on At the CCBG meeting of April 2019, Governors took took Governors of April 2019, the CCBG meeting At on Recent of the main findings of the “Snapshot note mostSADC While SADC”. in Developments Economic the criteria, primary the countries met convergence the secondary meeting majority criteria. had problems the CCBG Macroeconomic that noted Governors had reviewed Panel Review and Research Subcommittee on reports countrydiscussed papers, progress research a medium- and prepared convergence macroeconomic a macroeconomic agenda. Moreover, research term held on 28 February and 1 workshop convergence various identified the ECB, by facilitated 2019, March prior to be addressed issues to and key preconditions directed of a monetarythe attainment union. Governors the by researched be matters that cybersecurity/Fintech Group. Working and the Fintech Subcommittees relevant Governors, 3-5 April 2019, Pretoria, South Africa Pretoria, 3-5 April 2019, Governors, Saharan Africa were held in December 2018 and May May and 2018 December in held were Africa Saharan

Regional Cooperation and International Affiliation 126 Regional Cooperation and International Affiliation 127 INTERNATIONAL FINANCIAL CONSUMER INTERNATIONAL (FinCoNet) ORGANISATION PROTECTION published newsletter in the FinCoNet The Bank contributed on survey questionnaires and several in December 2018 conduct for market tools financial advertising, SupTech and governance supervisors, and financial product on a draft prepared report its views It also provided culture. of short-term on the provision Secretariat the OECD by jurisdictions. The Bank participated in the across credit and the Open meetings StandingFinCoNet Committee more learn Seminar in a bid to & International Meeting experience. members’ other from standards, and the International Association of Deposit Association of International and the standards, on standard a joint project for Corporation Insurance The Secretary Insurance. on Islamic Deposit development of IFSB17: out that the endorsement pointed General (Banking Regulation Finance Islamic for Principles Core one of the was Board the IMF Executive Segment) by the solicited He in 2018. achievements landmark IFSB’s support Core include the IFSB to of all Council members and Standards StabilityPrinciples in Financial Board’s Codes. the period throughout proactive more The IFSB has been with Council members and has collaborated under review bodies such as Basel Committee international and other on Banking Supervision and International (BCBS) of Securities Commissions. The Council Organization a BCBS representative have to initiative the IFSB’s noted of its Capital the revision for group in the IFSB working the of note took Council The Standard. Adequacy of banks risks in ensuring that operational interest IFSB’s particularly advancement, with technology associated in its be addressed and cybersecurity, Fintech to related Bank and the the both under review, During the year work. Financial Services Commission of Mauritius contributed comments and provided survey questionnaires various to and regulation Drafts covering on some IFSB Exposures supervision principles for core of Sharī`ah instruments, and risk- systems deposit insurance Islamic effective sharing. “IFSB21: “IFSB21: meeting of meeting th GB meeting hosted by Bank by hosted GB meeting nd GB meeting held on 5 December 2018 in 2018 December 5 on held meeting GB meeting of the Council of the IFSB held on 6 meeting st rd “IFSB20: Key Elements in the Supervisory Review “IFSB20: Key Undertakings”, of Takaful/Retakaful Process December 2018 in Jeddah, Saudi Arabia, the Governors the Governors in Jeddah, Saudi Arabia, December 2018 were Malaysia of Bangladesh Bank and Bank Negara and Deputy as the Chairperson Chairperson appointed December 2019. January 1 31 term the to for respectively standards new three of adoption the approved Council The namely the 34 hosted Malaysia Bank Negara and Islamic Finance Regulation” Principles for Core Promote to Disclosures on Standard Revised “IFSB22: Institutions Discipline for and Market Transparency Offering Islamic Financial Services”. The Council also Services Financial the of admission the approved Commission of Mauritius as Observer member. the Council on 29 April 2019. The Secretary General General Secretary The 2019. 29 April on Council the with four Structure IFSB Governance the new presented (SPP) Plan Performance Strategic for areas focus key and research, development standard namely, 2019-2021, and member satisfaction implementation, standard the to deliver financial sustainability of the IFSB in order servicesIslamic financial on the impact industry. desired of understanding that memoranda The Council noted Organisation Auditing and Accounting with signed were jointly undertake Islamic Financial Institutions to for revision and development to relating activities technical Sharīʿah, accounting and governance of prudential, Negara Malaysia on 30 April 2019 in Kuala Lumpur, Lumpur, in Kuala on 30 April 2019 Malaysia Negara on the selection process Discussions focussed Malaysia. of achievements operations, IILM’s CEO, the new for proposed performance indicators, corporate the 2018 The Budget. and 2019 performance indicators key 2019 the IILM Board of Chairpersons respective from updates policy and the drafting of a whistleblowing Committees that there note also on the agenda. The GB took were of the IFRS9 on the IILM of the adoption impact zero was external by the IILM’s as confirmed Financial Statement auditor. ISLAMIC FINANCIAL SERVICES BOARD the 33 At At the 21 the At Jeddah, Saudi Arabia, the Governor of Bank Negara Negara of Bank the Governor Saudi Arabia, Jeddah, Bank of Mauritius of Governor the from over took Malaysia Governor The 2019. GB for of the as Chairperson Deputyas appointed was Kuwait of Bank Central of cognizance of additional The GB took Chairperson. the following Primary which had been on-boarded Dealers in April 2018. platform of the auction successful migration treatment regulatory favourable The IILM Sukūk received A-1 reissued and the IILM successfully short-term Sukūk of 2-week tranches million in two USD550 amounting to of the note took also GB members and 3-month tenors. The Bank was CEO. appoint a new to actions initiated 22 at the also represented

Regional Cooperation and International Affiliation 7 Financial Statements 137 135 138 139 131 - 132 131 140 - 185 140 133 - 134 133 Statement of Distribution Overview ReportIndependent Auditor’s Statement of Financial Position 136 Income or Loss and Other Comprehensive Statement of Profit Statement of Changes in Equity Statement of Cash Flows the Financial Statements to Notes CONTENTS

Financial Statements 130 Financial Statements 131 Assets mainly increase continued to of the Bank assets Foreign denominated currency of foreign of purchases on account investments, of valuation the gain on fair and assets Rights Special Drawing currencies, of foreign revaluation hand, decreased on the other and Gold. Domestic assets, under the Special made of repayments mainly on account Line of Credit. Liabilities the mainly due to an increase Liabilities recorded an Bank of Mauritius Securities and continued issue of in circulation. in currency increase Capital and Reserves fair on gain of account on increased reserves Total of foreign and revaluation of investments valuation Rights and Gold, totaling Drawing Special currencies, the Special to transferred Rs9,669.8 million which was and with sections 47(1) in accordance Reserve Fund of the Act. 47(1A) Statement of Responsibilities Mauritius, is bank for The Bank, which acts as the central Act the of 3(4) section per as corporate body a as up set apply shall not 2001 Act that the Companies which states it. to of the Act, has, under section 12 of Directors The Board and policy of the affairs with the general been entrusted Responsibility the day-to-day the Bank. business of for of in terms been entrusted, the Bank has of administration who Deputy the two Governors to of the Act, section 14(3) shall act under the supervision of the Governor. of the is the principal representative The Governor policy of the the execution for Bank and is responsible the general for he is responsible Further, of the Board. supervisionfunctions, his of discharge the In Bank. the of the Board. to is answerable the Governor The Bank’s total assets (liabilities) increased by Rs22.8 by (liabilities) increased assets total The Bank’s billion at the end of June Rs237.4 from billion (9.6 percent) Rs260.2 billion as at the end of June 2019. to 2018 During the FY 2018/19 the Bank continued its open market the Bank continued its open market During the FY 2018/19 Rs3.5 billion to amounted cost and the thereof operations The increase FY2017/18. for Rs2.4 billion to compared Instruments higher amounts of Bank of Mauritius to relates liquidity in the domestic mop up the excess issued to amount of Bank of Mauritius Monetary The Policy market. Rs115.5 was at end of June 2019 outstanding Instruments that is, an billion at end June 2018, Rs92.1 billion, up from of Rs23.4 billion. increase The Total Comprehensive Income also includes Gain on Income Comprehensive Total The SDR of Rs3,455.3 and Currency of Foreign Revaluation million, of Gold of Rs2,724.5 million, Gain on Revaluation or Profit Through Value at Fair Gain on Financial Assets million and Gain on Financial Loss (FVTPL) of Rs2,367.5 Other Comprehensive Through Value at Fair Assets with million. In accordance of Rs1,122.4 Income (FVOCI) these amounts have of the Act, and 47(1A) sections 47(1) in resulting ReserveSpecial the Fund to been transferred 11(1) of the as per section of Rs83.8 million profit a net Act. The Total Comprehensive Income of the Bank for the for Bank the of Income Comprehensive Total The million was Rs9,753.6 year (FY) 2018/19 financial Loss of Rs733.7 Comprehensive a Total to compared Income Comprehensive The Total FY 2017/18. million for on financial income interest includes of Rs9,753.6 million million Rs3,120.6 to compared Rs4,643.4 million of assets FY 2017/18. for OVERVIEW Mauritius Act of the Bank of 11(1) section to According the determine shall Directors of Board the “Act”), (the for each (the “Bank”) Bank of Mauritius of the profits net for expenditure after all current meeting year, financial as it thinks and after provisions making such that year in assets, and doubtful debts, depreciation for bad fit staff funds and contributions to funds and superannuation contingencies. other The Bank is responsible for the preparation and fair fair and the preparation for is responsible The Bank in conformity of the financial statements presentation banks central applicable to principles with accounting with in accordance practices and best international of an and the implementation of the Act section 31(1) of the the reliability maintain to structure control internal reasonable but not to provide and financial statements and against the possibility assurance of errors absolute the financial statements. to material that are irregularities consider to 2019 September and 27 on 18 met The Board year financial for the of the Bank the financial statements ended 30 June 2019. The Board presently consists of the Governor as Governor consiststhe of presently Board The other five and Deputy two Chairperson, Governors but less than five not for provides The Act Directors. and The Governor Directors. other than seven more not of the the President by appointed are DeputyGovernors of the Prime of Mauritius, on the recommendation Republic five exceeding not term a for hold office and may Minister of The Minister re-appointment. eligible for and are years hold office who may Directors the other Finance appoints for eligible are They years. three exceeding not term a for of office. at the end of their term re-appointment

Financial Statements 132 Financial Statements 133 In connection with our audit of the financial statements, of the financial with our audit In connection statements, and, information other the read is to our responsibility is information the other so, consider whether in doing or our with the financial statements inconsistent materially or otherwise in the audit, obtained knowledge appears have we the work If, based on misstated. be materially to the to prior obtained information performed on the other is a that there conclude we report, of the auditor’s date are we information, of this other misstatement material in report to nothing have We that fact. report to required this regard. the financial Responsibilities for directors of the statements and fair the preparation for responsible are The directors with in conformity of the financial statements presentation banks central to the accounting principles applicable section 31(1) to pursuant practices and best international and in accordance 2004 of the Bank of Mauritius Act Financial Reporting The with International Standards. control internal such for also responsible are directors is necessary enable the determine to as the directors from free that are of financial statements preparation or error. fraud due to whether misstatement, material are the directors the financial statements, In preparing abilitygoing as a continue Bank’s the to for responsible to related disclosing, as applicable, matters concern, basis of and using the going concern going concern cease the Bank to for accounting unless it is intended of the Bank of Mauritius the provisions as per operations 2004. Act the Bank’s overseeing for responsible are The directors reporting process. financial the financial the audit of responsibilities for Auditor’s statements about assurance reasonable obtain to are Our objectives from free are as a whole the financial statements whether and or error, fraud due to whether misstatement, material that includes our opinion. report issue an auditor’s to but of assurance, is a high level assurance Reasonable in accordance that an audit conducted a guarantee is not when misstatement material a detect always will ISAs with and or error fraud can arise from Misstatements exists. it if, individually or in the aggregate, material considered are influence the to be expected could reasonably they on the basis of these taken economic decisions of users financial statements. Our opinion on the financial statements does not cover cover does not Our opinion on the financial statements of form any express do not we and information the other or conclusion thereon. assurance The directors are responsible for the other information. information. the other for responsible are The directors of this auditor’s at the date obtained information The other of “Overview”the comprises report the statement and include the financial statements distribution, but does not thereon. report and our auditor’s Other information We conducted our audit in accordance with International with International our audit in accordance conducted We under Our responsibilities (ISAs). on Auditing Standards further described in the Auditor’s are those Standards of the Financial Statements Audit for Responsibilities independent of the Bank are We section of our report. Ethics Standard with the International in accordance Professional Code of Ethics for Accountants’ for Board our fulfilled have we (IESBA Code) and Accountants the with accordance in responsibilities ethical other have we audit evidence that the believe IESBA Code. We a basis to provide is sufficient and appropriate obtained our opinion. for Basis for opinion Basis for In our opinion, the accompanying financial statements financial statements In our opinion, the accompanying of the position the financial of view and fair a true give its financial performance and of Bank as at 30 June 2019, with in accordance year then ended for the and cash flows Financial Reporting (IFRSs) and International Standards of the Bank of Mauritius Act with the provisions comply 2004. We have audited the financial statements of Bank of the financial statements audited have We which 185, to out on pages 135 Mauritius (the “Bank”) set as at 30 of financial position the statement comprise other or loss and of profit the statement and June 2019, in equity of changes statement income, comprehensive and year then ended, for the of cash flows and statement including a summary the financial statements, of to notes significant accounting policies. Opinion Report on audit of the financial statements Independent auditor’s report to auditor’s Independent of of Bank of Directors the Board Mauritius material uncertainty exists, we are required to draw draw to required uncertaintymaterial are we exists, disclosures the related to report in our auditor’s attention are if such disclosures or, in the financial statements Our conclusions are our opinion. modify to inadequate, of the date up to obtained the audit evidence based on report. our auditor’s the Bank cause or conditions may events Unforeseen in the future. continue as a going concern cease to to and content structure presentation, overall the Evaluate disclosures, including the of the financial statements, the represent the financial statements and whether that in a manner events and transactions underlying presentation. fair achieves • governance with with those charged communicate We scope and the planned matters, other among regarding, findings, including timing of the audit and significant audit we that control in internal significant deficiencies any identify during our audit. of of Directors the Board is made solely to This report has been Our audit work Bank of Mauritius, as a body. of Directors the Board to might state so that we undertaken them to state to required are we of the Bank those matters do not We purpose. no other and for report in an auditor’s than the other anyone to or assume responsibility accept our audit for body, a the Bank as of Directors of Board formed. have the opinions we or for this report, for work, Identify and assess the risks of material misstatement of misstatement of material assess the risks Identify and or error, to fraud due whether the financial statements, to responsive design and perform audit procedures sufficient is that evidence audit obtain and risks, those our opinion. The a basis for provide to and appropriate resulting misstatement a material detecting of not risk error, from resulting one is higher than for fraud from intentional collusion, forgery, involve may as fraud of or the override omissions, misrepresentations, control. internal relevant control of internal an understanding Obtain that procedures design audit to order the audit in to the for but not in the circumstances, appropriate are an opinion on the effectiveness of expressing purpose control. internal of the Bank’s of accounting policies the appropriateness Evaluate of accounting estimates used and the reasonableness management. made by disclosures and related use of the directors’ Conclude on the appropriateness of accounting and, based basis of the going concern material a whether obtained, evidence on the audit or conditions that events to uncertainty related exists abilityto Bank’s the on doubt castsignificant may conclude that a If we continue as a going concern. • • • • As part of an audit in accordance with ISAs, we exercise exercise we As part with ISAs, of an audit in accordance professional and maintain judgement professional also: the audit. We throughout skepticism 2019 September 27 Licensed by FRC by Butonkee Licensed Accountants Twaleb Deloitte Chartered

Financial Statements 134 Financial Statements 135 Rs 2018 10,942,265 262,294,115 198,321,453 654,928,248 100,000,000 777,255,026 350,223,856 5,147,013,086 7,304,426,157 1,850,704,908 4,437,626,880 2,000,000,000 11,500,243,674 92,110,620,664 18,163,452,321 16,163,452,321 43,410,725,607 90,867,810,407 75,026,109,038 17,282,602,558 78,497,633,490 34,077,888,842 86,986,968,280 219,199,745,898 237,363,198,219 237,363,198,219 230,058,772,062 - Rs 2019 9,984,803 624,820,185 801,987,535 100,000,000 298,487,469 464,454,792 5,751,573,914 6,823,013,774 3,105,363,785 4,631,502,723 1,883,038,779 2,000,000,000 73,856,911,276 36,415,731,382 84,153,487,960 69,662,272,514 96,217,345,268 20,010,473,008 27,799,710,436 53,015,860,003 25,799,710,436 253,397,166,239 260,220,180,013 115,494,265,470 232,420,469,577 260,220,180,013

Governor

6

7

8

5 5 11 12 17 10 13 14 15 16 9(a) 9(a) Note Y. Googoolye Y. Governor Punchoo Deputy M.V. Second

ASSETS Assets Foreign Cash and Cash Equivalents

Gold Deposits Financial Assets held at Fair Value Through Other Comprehensive Income Comprehensive Other Through Value held at Fair Financial Assets Financial Assets held at Fair Value Through Profit or Loss Profit Through Value held at Fair Financial Assets

Domestic Assets Domestic held at AmortisedFinancial assets Cost Financial Assets held at Fair Value Through Profit or Loss Profit Through Value held at Fair Financial Assets Computer Software Computer Property, Plant and Equipment Property, Other Assets

TOTAL ASSETS TOTAL LIABILITIES in Circulation Currency Demand Deposits Government Banks Other Financial Institutions Others

Monetary Instruments Policy Provisions Employee Benefits Employee Other Liabilities TOTAL LIABILITIES TOTAL AND RESERVES CAPITAL Up Capital and Paid Stated Reserves TOTAL CAPITAL AND RESERVES CAPITAL TOTAL AND RESERVES LIABILITIES, CAPITAL TOTAL 27 September 2019 September 27 H.S. Sewraj-Gopal (Mrs) Sewraj-Gopal H.S. Secretary as at 30 June 2019 as at Statement Position Financial of - Rs 58,174,437 27,198,678 80,167,362 2018 57,424,341 28,673,878 67,330,936 424,042,168 157,427,592 196,948,477 136,055,847 143,644,520 307,475,085 189,804,440 (169,018,362) (831,822,044) (813,822,966) (952,279,689) (733,655,604) 1,156,596,706 1,185,653,202 2,367,236,159 1,963,956,213 2,447,403,521 1,043,253,736 3,633,056,723 Rs 2019 5,039,937 6,335,944 8,292,784 41,888,919 24,939,132 41,546,661 62,036,184 53,538,888 101,157,219 414,261,818 374,981,731 217,641,403 236,104,084 1,116,067,484 1,130,696,212 2,471,285,079 2,172,098,529 1,337,031,892 2,724,518,858 3,455,340,371 2,367,498,489 8,622,887,780 3,466,925,738 9,753,583,992 12,089,813,518 13,426,845,410 21 24 20 22 23 9(b) Note 18(a) 19(a) 18(b) 16(a) 19(b) Income Interest Income on Financial Assets using Assets Income on Financial Interest Rate Interest Effective Interest and Similar Income on Financial Assets at Assets and Similar Income on Financial Interest or Loss Profit Through Value Fair Miscellaneous Income Gain on Revaluation of Foreign Currency and SDR Currency of Foreign Gain on Revaluation Gain on Revaluation of Gold Deposits Gain on Revaluation Gain/(Loss) on Financial Assets at Assets Gain/(Loss) on Financial or Loss Profit Through Value Fair Total Income Total Expenditure Staff Salaries and Other Benefits General Expenditure General Fees Payable Fees Coin Issue Expenses Note Issue Expenses Note Depreciation and Amortisation Depreciation Directors’ Remuneration Directors’ IMF Charges Loss Allowance Charge Loss Allowance Other Expenditure Total Expenditure Total Surplus of Income over Expenditure before Expenditure of Income over Surplus Cost Monetary of Conducting Policy OPEN MARKET OPERATIONS Cost of Conducting Monetary Policy NET PROFIT FOR THE YEAR NET PROFIT FOR OTHER COMPREHENSIVE INCOME OTHER or Loss to Profit subsequently be reclassified that will not Items benefit liability of defined Remeasurements Items that will be reclassified subsequently to Profit or Loss to Profit subsequently that will be reclassified Items held at Gain/(Loss) on Financial Assets Value Fair Net Income Other Comprehensive Through Value Fair during the Year to Financial relation in adjustments Reclassification Other Through Value held at Fair Assets of in the year Income disposed Comprehensive TOTAL COMPREHENSIVE INCOME/(LOSS) TOTAL for the Year Ended 30 June 2019 Ended 30 Year the for Statement of Profit or Loss and Other Comprehensive Income Comprehensive and Other Loss or StatementProfit of

Financial Statements 136 Financial Statements 137 - - Rs 2018 443,927,212 831,822,044 644,804,604 (443,927,212) (143,644,520) (733,655,604) (1,043,253,736) - Rs 2019 71,249,419 83,822,846 (12,573,427) 9,753,583,992 (1,122,403,428) (2,724,518,858) (3,455,340,371) (2,367,498,489) TOTAL COMPREHENSIVE INCOME/(LOSS) FOR THE YEAR-AS FOR COMPREHENSIVE INCOME/(LOSS) PER IFRS TOTAL Transfer to Special Reserve Fund in terms of Section 47(1) of the Bank of Mauritius of the Bank of Mauritius of Section 47(1) in terms Special Reserve Fund to Transfer and SDR Currency of Foreign on Revaluation 2004-Gain Act Transfer to Special Reserve Fund in terms of Section 47(1) of the Bank of Mauritius of the Bank of Mauritius of Section 47(1) in terms Special Reserve Fund to Transfer of Gold on Revaluation 2004-Gain Act Transfer (to)/from Special Reserve Fund in terms of Section 47(1A) of the Bank of of the Bank 47(1A) of Section in terms Special Reserve Fund (to)/from Transfer at FVTPL on financial assets 2004-(Gain)/Loss Mauritius Act Transfer (to)/from Special Reserve Fund in terms of Section 47(1A) of the Bank of of the Bank 47(1A) of Section in terms Special Reserve Fund (to)/from Transfer at FVOCI on financial assets 2004-(Gain)/Loss Mauritius Act NET PROFIT/(LOSS) FOR THE YEAR IN TERMS OF SECTION 11 (1) OF THE 11 THE YEAR IN TERMS OF SECTION FOR NET PROFIT/(LOSS) 2004 ACT BANK OF MAURITIUS Transfer from Special Reserve Fund in terms of section 47(5)(b) of the Bank of of section 47(5)(b) in terms Special Reserve Fund from Transfer 2004 Mauritius Act Transfer to General Reserve Fund in terms of section 11(2) of the Bank of Mauritius of section 11(2) in terms Reserve Fund General to Transfer 2004 Act BALANCE OF NET PROFITS PAYABLE INTO THE CONSOLIDATED FUND IN THE CONSOLIDATED INTO BALANCE OF NET PROFITS PAYABLE 2004 ACT BANK OF MAURITIUS OF THE 11(3) TERMS OF SECTION For the purpose of Section 47(1A) of the Bank of Mauritius Act 2004, gains and losses on investments managed by by managed gains and losses on investments 2004, of the Bank of Mauritius Act of Section 47(1A) the purpose For the Bank. to remitted are until proceeds as unrealised treated are managers external The above Statement of Distribution has been prepared according to the requirements of the Bank of Mauritius Act Act of the Bank of Mauritius the requirements to according of Distribution has been prepared Statement The above part form of the primary and does not 2004 statements. for the Year Ended 30 June 2019 Ended 30 Year the for StatementDistribution of

Balance at 30 June 2019 June 30 at Balance 27,799,710,436 - 23,097,308,181 2,702,402,255 2,000,000,000

Transfer to Consolidated Fund Fund Consolidated to Transfer (71,249,419) (71,249,419) - - -

Transfer to General Reserve General to Transfer - (12,573,427) - 12,573,427 -

Transfer to Special Reserve Fund Reserve Special to Transfer - (9,669,761,146) 9,669,761,146 - -

Total comprehensive income comprehensive Total 9,753,583,992 9,753,583,992 - - -

Other comprehensive income for the year the for income comprehensive Other 1,130,696,212 1,130,696,212 - - -

Net Profit for the year the for Profit Net 8,622,887,780 8,622,887,780 - - -

Balance at 01 July 2018 on adoption of IFRS 9 IFRS of adoption on 2018 July 01 at Balance 18,117,375,863 - 13,427,547,035 2,689,828,828 2,000,000,000

Impact of adopting IFRS 9 IFRS adopting of Impact 2(e) - (46,076,458) - (46,076,458) -

Balance at 01 July 2018 July 01 at Balance 2,000,000,000 2,689,828,828 13,473,623,493 18,163,452,321 -

Balance at 30 June 2018 June 30 at Balance 2,000,000,000 2,689,828,828 13,473,623,493 18,163,452,321 -

Transfer from Special Reserve Fund Reserve Special from Transfer - (733,655,604) - 733,655,604 -

Total comprehensive loss comprehensive Total - - (733,655,604) - (733,655,604)

Other comprehensive loss for the year the for loss comprehensive Other - - (813,822,966) - (813,822,966)

Net Profit for the year the for Profit Net - - 80,167,362 - 80,167,362

Balance at 01 July 2017 2017 July 01 at Balance 2,000,000,000 2,689,828,828 14,207,279,097 18,897,107,925 -

Note Rs Rs Rs Rs Rs

Up Capital Up Fund Fund Profit

Total

Stated and Paid Paid and Stated General Reserve Reserve General Special Reserve Reserve Special Accumulated Accumulated for the Year Ended 30 June 2019 Ended 30 Year the for Statement Equity in Changes of

Financial Statements 138 Financial Statements 139 - Rs 1,718,809 7,564,887 2018 (9,320,060) (476,975,813) (189,930,384) (359,852,078) (2,790,504,779) 15,668,981,307 43,410,725,607 46,561,082,464 50,793,078,286 (68,585,621,811) (53,106,607,252) - Rs 2019 2,174,358 (2,598,044) 16,902,811 310,000,000 261,826,454 (130,684,447) 9,343,307,942 (1,400,497,815) (4,590,631,700) (3,385,928,563) 43,410,725,607 53,015,860,003 13,933,939,642 11 10 25 Note Effect of exchange rate fluctuations on Cash and Cash Equivalents rate Effect of exchange at end of the Year Cash and Cash Equivalents Net movement in Financial Assets held at Fair Value Through Profit or Loss Profit Through Value held at Fair in Financial Assets movement Net Securities in Government movement Net plant and equipment sale of property, from Proceeds Dividend received Activities Cash used in Investing Net FINANCINGFROM ACTIVITIES FLOWS CASH Fund the Consolidated paid into profits Balance of net in Cash and Cash Equivalents increase/(decrease) Net at startCash and Cash Equivalents of the Year CASH FLOWS FROM INVESTING ACTIVITIES INVESTING FROM FLOWS CASH Other Through Value held at Fair in Financial Assets movement Net Income Comprehensive assets Intangible to Additions plant and equipment of property, Acquisition CASH FLOWS FROM OPERATING ACTIVITIES OPERATING FROM FLOWS CASH Activities Operating from Cash Generated Net for the Year Ended 30 June 2019 Ended 30 Year the for StatementFlowsCash of Notes to the Financial Statements for the Year Ended 30 June 2019

Financial Statements 1. LEGAL FRAMEWORK

In terms of section 4(2)(c) of the Bank of Mauritius Act 2004 (the “Act”), the Bank is established to act as the Central Bank for Mauritius. Its main place of business is at Sir William Newton Street, Port Louis, and it operates an office in Rodrigues. The Bank is an independent institution with its own legal personality and submits, in accordance with section 32 (3) of the Act, a copy of its audited financial statements to the Minister, to whom the subject of Finance is assigned, who lays a copy thereof before the National Assembly.

The primary objective of the Bank is to maintain price stability and to promote orderly and balanced economic development.

To attain these objectives, the Bank’s principal functions are to:

• conduct monetary policy and manage the exchange rate of the Mauritian Rupee, taking into account the orderly and balanced economic development of Mauritius; • regulate and supervise financial institutions carrying on activities in, or from within, Mauritius; • manage, in collaboration with other relevant supervisory and regulatory bodies, the clearing, payment and settlement systems of Mauritius; • collect, compile, disseminate, on a timely basis, monetary and related financial statistics; and • manage the foreign exchange reserves of Mauritius.

Under section 10 of the Act, the stated and paid up capital of the Bank shall be not less than one billion rupees and shall be subscribed and held solely by the Government of Mauritius. Further, the amount paid as capital of the Bank may be increased from time to time by transfer from the General Reserve Fund or the Special Reserve Fund of such amounts as the Board may, with the approval of the Minister, resolve. The capital was increased to Rs2 billion in November 2011.

Under section 11(1) of the Act, the Board shall determine the net profits of the Bank for each financial year, after meeting all current expenditure for that year and after making such provision as it thinks fit for bad and doubtful debts, depreciation in assets, contributions to staff funds and superannuation funds and other contingencies.

Under section 11(2) of the Act, the Bank shall establish a General Reserve Fund to which shall be allocated, at the end of every financial year of the Bank, 15 per cent of the net profits of the Bank.

Under section 11(3) of the Act, the balance of the net profits for the financial year remaining after the allocation made under subsection 11(2) shall, subject to subsection 11(4), be paid into the Consolidated Fund as soon as practicable after the end of every financial year. Section 11(4) of the Act provides that subject to subsection 11(5), the balance in the General Reserve Fund shall be at least equivalent to the amount paid as capital of the Bank. Under section 11(5) of the Act, where, at any time, the balance in the General Reserve Fund is less than the amount paid as capital of the Bank, the Bank shall endeavour to bring the balance to the required level.

Further, under section 11(6) of the Act, no allocation under subsection 11(3) shall be made where, in the opinion of the Board:

(a) the assets of the Bank are, or after such allocation would be, less than the sum of its liabilities and paid up capital; or (b) the Bank would not be in a financial position to conduct its activities properly. Under section 11 (3A) of the Act, the Bank may, with the approval of the Board, create, out of its net profits, reserves for monetary policy purposes or such other specific purposes as the Bank may determine in conformity with accounting principles applicable to central banks and best international practices.

140 Notes to the Financial Statements for the Year Ended 30 June 2019 (continued)

2. BASIS OF PREPARATION Financial Statements

(a) Statement of Compliance

In terms of section 31(1) of the Act, the accounting of the Bank shall, at all times be carried out in conformity with accounting principles applicable to central banks and best international practices. In line with best practices, the Bank has prepared its financial statements in accordance with International Financial Reporting Standards (“IFRS”).

(b) Basis of Measurement

The financial statements have been prepared on the historical cost basis except for the following:

• financial instruments at fair value through profit or loss and financial instruments at fair value through other comprehensive income are measured at fair value; and • the liability for defined benefit obligations is recognised as the fair value of plan assets less the present value of the defined benefit obligations. (c) Functional and Presentation Currency

These financial statements are presented in Mauritian Rupee (“Rs”), rounded to the nearest rupee, which is the Bank’s functional currency.

(d) Use of Estimates and Judgements

The preparation of financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future periods affected.

Information about significant areas of estimation uncertainty and critical judgements in applying accounting policies that have the most significant effect on the amounts recognised in these financial statements are described in Note 4.

(e) Application of New and Revised International Financial Reporting Standards (IFRS)

In the current year, the Bank has applied all of the new and revised Standards and Interpretations issued by the International Accounting Standards Board (“IASB”) and the International Financial Reporting Standards Interpretations Committee (“IFRS IC”) of the IASB that are relevant to its operations and effective for accounting periods beginning on or after 1 July 2018.

(i) Relevant Standards and Interpretations applied with no effect on the financial statements IAS 39 Financial Instruments: Recognition and Measurement - Amendments to permit an entity to elect to continue to apply the hedge accounting requirements in IAS 39 for a fair value hedge of the interest rate exposure of a portion of a portfolio of financial assets or financial liabilities when IFRS 9 is applied, and to extend the fair value option to certain contracts that meet the ‘own use’ scope exception

IFRIC 22 Foreign Currency Transactions and Advance Consideration

141 Notes to the Financial Statements for the Year Ended 30 June 2019 (continued)

Financial Statements 2. BASIS OF PREPARATION (CONT’D)

(e) Application of New and Revised International Financial Reporting Standards (IFRS) (Cont’d)

Management anticipates that the application of the above Standards in future years will have no material impact on the financial statements of the Bank on their effective dates in future periods.

(ii) New and Revised IFRS that are effective for the current year IFRS 7 Financial Instruments: Disclosures - Additional hedge accounting disclosures (and consequential amendments) resulting from the introduction of the hedge accounting chapter in IFRS 9

IFRS 7 Financial Instruments: Disclosures - Deferral of mandatory effective date of IFRS 9 and amendments to transition disclosures

IFRS 9 Financial Instruments - Finalized version, incorporating requirements for classification and measurement, impairment, general hedge accounting and derecognition IFRS 9 Financial Instruments – Amendments regarding the interaction of IFRS 4 and IFRS 9

IFRS 9 Financial Instruments - Amendments regarding prepayment features with negative compensation and modifications of financial liabilities

Impact of Initial Application of IFRS 9 Financial Instruments

The Bank applied IFRS 9 using the modified retrospective method, with an initial application date of 1 July 2018. In accordance with the transition provision of IFRS 9 the Bank has not restated comparative information for the financial year 2018 for financial instruments in the scope of IFRS 9. Therefore, the comparative information is reported under IAS 39 and is not comparable to the information presented for the financial year 2019. Differences arising from the adoption of IFRS 9 have been recognised directly in the Special Reserve Fund as of 01 July 2018 and are disclosed in the Statement of Changes in Equity.

The key changes to the accounting policies of the Bank on account of introduction of IFRS 9 have been summarised below:

Changes to classification and measurement

To determine the classification and measurement category, lFRS 9 requires all financial assets, except equity instruments and derivatives, to be assessed based on a combination of the Bank’s business model for managing the assets and the instruments’ contractual cash flow characteristics.

The IAS 39 measurement categories of financial assets of held-to-maturity (at amortised cost), available-for-sale (AFS), fair value through profit or loss (FVTPL) and loans and receivables have been replaced by:

• Debt instruments at amortised cost; • Debt instruments at fair value through other comprehensive income (FVOCI), with gains or losses recycled to profit or loss on derecognition; • Equity instruments at FVOCI, with no recycling of gains or losses to profit or loss on derecognition; and • Financial assets at FVTPL.

142 Notes to the Financial Statements for the Year Ended 30 June 2019 (continued)

2. BASIS OF PREPARATION (CONT’D) Financial Statements

(e) Application of New and Revised International Financial Reporting Standards (IFRS) (Cont’d)

Changes to classification and measurement (cont’d)

The classification of financial liabilities under IFRS 9 remains broadly the same as under IAS 39. The main impact on measurement from the classification of liabilities under IFRS 9 relates to the element of gains or losses for financial liabilities designated as at FVTPL attributable to changes in credit risk. IFRS 9 requires that such element be recognised in other comprehensive income (OCI), unless this treatment creates or enlarges an accounting mismatch in profit or loss, in which case, all gains and losses on that liability (including the effects of changes in credit risk) should be presented in profit or loss. The Bank has not designated any financial liabilities at FVTPL. Therefore, this requirement has not had an impact on the Bank.

The Bank‘s classification of its financial assets and liabilities is explained in Note 2(e). The quantitative impact of applying IFRS 9 as at 01 July 2018 is disclosed as per Application of IFRS 9-Transition Disclosure Table.

Changes to the impairment calculation

The adoption of IFRS 9 has fundamentally changed the Bank’s accounting for Expected Credit Loss (ECL) in- scope financial assets loss impairments by replacing lAS 39’s incurred loss approach with a forward-looking ECL approach. IFRS 9 requires the Bank to record an allowance for ECLs for all loans and other debt financial assets not held at FVTPL, together with loan commitments and financial guarantee contracts. The allowance is based on the ECLs associated with the probability of default in the next twelve months unless there has been a significant increase in credit risk since origination where the ECLs are calculated over the life time of the asset. If the financial asset meets the definition of purchased or originated credit impaired (POCI), the allowance is based on the change in the ECLs over the life of the asset.

Details of the Bank’s impairment method are disclosed in Note 2(e). The quantitative impact of applying IFRS 9 as at 01 July 2018 is disclosed as per Application of IFRS 9-Transition Disclosure Table.

Application of IFRS 9 - Transition disclosure

The following pages set out the impact of adopting IFRS 9 on the statement of financial position, and reserves including the effect of replacing IAS 39’s incurred credit loss calculations with IFRS9’s ECLs.

143 Notes to the Financial Statements for the Year Ended 30 June 2019 (continued) Financial Statements FVTPL FVTPL FVTPL FVTPL FVTOCI FVTOCI Category Amortised Cost Amortised Cost Amortised Cost Amortised Cost Amortised Cost Amortised Cost Amortised Cost Amortised Cost Amortised Cost Amortised Cost - - IFRS 9 25,038,017 53,870,202 88,093,069 20,428,884 912,192,125 Opening 477,996,687 637,509,556 1 July 2018 4,121,190,593 4,376,335,357 Balance as at 5,335,327,863 3,792,559,796 15,130,689,530 14,422,132,967 17,282,602,558 89,955,618,282 78,473,665,246 ------Other 17,340,981 17,340,981 ------10,519 77,711 29,294 29,296 Remeasurement ECL 4,620,413 23,968,244 28,735,477 ------Re- 20,428,884 (20,428,884) 654,928,248 (654,928,248) classification -

88,122,365 25,038,017 financial 53,870,202 20,428,884 912,192,125 Amount as 478,025,981 654,928,248 statements per audited per audited 4,121,190,593 3,792,570,315 4,376,335,357 5,335,327,863 15,135,309,943 14,422,132,967 17,282,602,558 89,955,618,282 78,497,633,490 under IAS 39 Current Classification Current

at fair Financial assets or profit through value loss Loans and receivables Loans and receivables Available for sale for Available Loans and receivables Loans and receivables Loans and receivables Loans and receivables Loans and receivables Loans and receivables Loans and receivables Fair value through profit profit through value Fair or loss Loans and receivables Fair value through profit profit through value Fair or loss sale for Available Fair value through profit profit through value Fair or loss Assets Nature of Financial Nature To Financial assets at Financial assets To Amortised Cost To Financial assets at Financial assets To FVTPL of Government Mauritius Bonds Foreign Currency Notes Currency Foreign Others Foreign Investments Foreign Rights Special Drawing Agreement Repurchase Accounts Current in Special Line of Credit Local Currency Short Term Deposit Short Term Accounts in Special Line of Credit Currency Foreign Staff loans Gold Deposits balances due in Net clearing Foreign Investments Investments Foreign Fund (Managed by Managers) Investments Foreign Managed Internally Unquoted Investments Unquoted

Investment in Investment Government Securities Cash and Equivalents Loans and Advances Gold Deposits Other Assets Other Balances and Placements Other Investments

Local Assets Local instruments as per Assets Foreign Category of financial Financial Statements The total re-measurement loss of Rs46,076,458 was recognised against the Special Reserve Fund as at 1 July 2018 in respect of expected credit loss amounting credit of expected in respect as at 1 July 2018 against the Special Reserve Fund recognised was loss of Rs46,076,458 re-measurement The total profit value through fair at financial assets of Mauritius Bonds from of Government on re-classification and amortisation of Rs17,340,981 impact Rs28,735,477 to at amortised financial assets or loss to cost. 144 Notes to the Financial Statements for the Year Ended 30 June 2019 (continued)

2. BASIS OF PREPARATION (CONT’D) Financial Statements

(e) Application of New and Revised International Financial Reporting Standards (IFRS) (Cont’d)

(iii) New and Revised Standards and Interpretations in issue but not yet effective

At date of authorisation of these financial statements, the following relevant Standards and interpretations were in issue but effective on annual periods beginning on or after the respective dates as indicated:

IAS 1 Presentation of financial statements – Amendments regarding the definition of material (effective 1 January 2020) IAS 8 Accounting policies, changes in Accounting Estimates and Errors – Amendments regarding the definition of material (effective 1 January 2020) IAS 19 Employee Benefits - Amendments regarding plan amendments, curtailments or settlements (effective 1 January 2019) IFRS 9 Financial Instruments - Amendments regarding prepayment features with negative compensation and modifications of financial liabilities - (effective 1 January 2019) IFRS 16 Leases - Original issue - (effective 1 January 2019)

The directors anticipate that these Standards and Interpretation will be applied on their effective dates in future periods. Except as detailed below, the directors have not yet had an opportunity to consider the potential impact of the application of these amendments.

IFRS 16 Leases

IFRS 16 provides a comprehensive model for the identification of lease arrangements and their treatment in the financial statements for both lessors and lessees. IFRS 16 will supersede the current lease guidance including IAS 17 Leases and the related Interpretations when it becomes effective for accounting periods beginning on or after 1 January 2019. The date of initial application of IFRS 16 for the Bank will be 1 July 2019.

Under the new standard, an asset (the right to use the leased item) and a financial liability to pay rentals are recognised. Lessees will be required to separately recognise the interest expense on the lease liability and the depreciation expense on the right-of-use asset. The only exceptions are short-term and low-value leases.

Under IFRS 16, right of use assets will be tested for impairment in accordance with IAS36 Impairment of Assets. This will replace the previous requirement to recognise a provision for onerous lease contracts.

For short-term leases (lease term of 12 months or less) and leases of low value assets (such as personal computers and office furniture) the Bank will opt to recognise a lease expense on a straightline basis as permitted by IFRS 16.

As at 30 June 2019, the Bank have noncancellable operating lease commitments of Rs12,056,673. A preliminary assessment indicates that all these arrangements relate to leases other than short-term leases and leases of low value assets. Management has not yet assessed the amounts for right of use asset and corresponding liability in respect of these leases.

Under IFRS 16, a lessor continues to classify leases as either finance leases or operating leases and account for those two types of leases differently.

The Bank’s activities as a lessor are not material and hence the Bank does not expect any significant impact on the financial statements. However, some additional disclosures will be required from next year.

145 Notes to the Financial Statements for the Year Ended 30 June 2019 (continued)

Financial Statements 3. ACCOUNTING POLICIES

(a) Financial Instruments

Policy applicable before 1 July 2018

(i) Initial Recognition

The Bank recognises all financial instruments on its Statement of Financial Position when it becomes a party to the contractual provisions of the instrument. All regular transactions entered by the Bank are recognised on a settlement date basis.

(ii) Classification and measurement

Financial assets are classified into the following specified categories: financial assets ‘at fair value through profit or loss’ (FVTPL), ‘available-for sale’ (AFS) financial assets and ‘loans and receivables’. The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition. All regular way purchases or sales of financial assets are recognised and derecognised on a settlement date basis. Regular way purchases or sales of financial assets require delivery of assets within the time frame established by regulation or convention in the marketplace.

Financial assets and financial liabilities at fair value through profit or loss are initially recognised on the value date, which is the date on which the Bank becomes a party to the contractual provisions of the instrument. Other financial assets and financial liabilities are recognised on the date on which they are originated. Financial assets and financial liabilities at fair value through profit or loss are initially recognised at fair value, with transaction costs recognised in profit or loss, and subsequently measured at fair value. The Bank’s Foreign Investments, Gold deposits, Other Investments and Investment in Government Securities fall under this category.

AFS financial assets are non-derivatives that are either designated as AFS or not classified as (a) loans and receivables, (b) held-to-maturity or (c) financial assets at fair value through profit or loss.

Investments held by the Bank that are classified as AFS are stated at fair value at each reporting date. Fair value is determined in the manner described in Note 28. Changes in the carrying amount of AFS financial assets relating to changes in foreign currency rates (see below), interest income calculated using the effective interest rate method and dividends on AFS equity investments are recognised in statement of profit or loss. Other changes in the carrying amount of AFS financial assets are recognised in other comprehensive income and accumulated in the Special Reserve Fund. When the investment is disposed of or is determined to be impaired, the cumulative gain or loss previously accumulated in the Special Reserve Fund is reclassified to statement of profit or loss.

Dividends on AFS equity instruments are recognised in the statement of profit or loss when the Bank’s right to receive the dividends is established. The fair value of AFS monetary financial assets denominated in a foreign currency is determined in that foreign currency and translated at the rate of exchange ruling at the reporting date.

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and that the Bank does not intend to sell immediately or in the near term. They are initially measured at fair value plus incremental direct transaction costs, and subsequently measured at their amortised cost using the effective interest method. Loans and receivables comprise Cash and Cash Equivalents (excluding Gold Deposits and foreign investments), Deposit Accounts, Loans and Advances to commercial banks or other financial institutions under Special Lines of Credit and certain Other Assets of the Bank.

Financial liabilities comprise of demand deposits, currency in circulation, Bank of Mauritius Securities and other liabilities. The Bank recognises all its financial liabilities initially at the value of the consideration received for those liabilities, excluding transaction costs and subsequently measures them at amortised cost.

146 Notes to the Financial Statements for the Year Ended 30 June 2019 (continued)

3. ACCOUNTING POLICIES (CONT’D) Financial Statements

(a) Financial Instruments (Cont’d)

Policy applicable before 1 July 2018 (Cont’d)

(ii) Classification and measurement (Cont’d)

The Bank has the possibility to designate any financial asset or financial liability at FVTPL, that is, at fair value with changes in fair value recognised through profit or loss provided that the financial asset or financial liability satisfies certain conditions.

(iii) Derecognition

Financial assets are derecognised when the contractual rights to receive cash flows from these assets have ceased to exist or the assets have been transferred and substantially all the risks and rewards of ownership of the assets are also transferred (that is, if substantially all the risks and rewards of ownership have not been transferred, the Bank tests control to ensure that continuing involvement on the basis of any retained powers of control does not prevent derecognition). Financial liabilities are derecognised only when the obligation is discharged, cancelled or expired.

(iv) Government Securities

Other Government Securities comprise bonds with maturities ranging between two to twenty years which have been amortised using the straight line method

Policy applicable as from 1 July 2018

Classification of financial assets

IFRS 9 Financial Instruments: Recognition and Measurement outlines the requirements for the recognition and measurement of financial assets and liabilities and replaces IAS 39.

Financial instruments are initially recognised when an entity becomes a party to the contractual provisions of the instrument, and are classified into various categories depending upon the type of instrument, which then determines the subsequent measurement of the instrument.

IFRS 9 classification is based on two aspects; the business model within which the asset is held (the business model test) and the contractual cash flows of the asset which meet the solely payments of principal and interest (‘SPPI’) test.

IFRS 9 includes three principal classification categories for financial assets: measured amortised cost, fair value through other comprehensive income (FVOCI) and fair value through profit or loss (FVTPL). The Bank determines the classification at initial recognition.

A financial asset is measured at amortised cost if it meets both of the following conditions and is not designated as at FVTPL:

• The asset is held within a business model whose objective is to hold assets to collect contractual cash flows; and • The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payment of principal and interest on the principal amount outstanding.

147 Notes to the Financial Statements for the Year Ended 30 June 2019 (continued)

Financial Statements 3. ACCOUNTING POLICIES (CONT’D)

(a) Financial Instruments (Cont’d)

Policy applicable as from 1 July 2018 (Cont’d)

Classification of financial assets (Cont’d)

A debt instrument is measured at FVOCI only if it meets both of the following conditions and is not designated as at FVTPL:

• The asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial Assets; and • The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payment of principal and interest on the principal amount outstanding. All other financial assets are classified at FVTPL.

On initial recognition of an equity investment that is not held for trading, the Bank may irrevocably elect to present subsequent changes in fair value in other comprehensive income. This election is made on an investment basis.

In addition, on initial recognition, the Bank may irrevocably designate a financial asset that otherwise meets the requirements to be measured at amortised cost or at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.

Business model assessment

The Bank makes an assessment of the objective of a business model in which an asset is held at a portfolio level because this best reflects the way the business is managed and information is provided to management. The information considered includes:

• the stated policies and objectives for the portfolio and the operation of those policies in practice; • how the performance of the portfolio is evaluated and reported to management; • the risks that affect the performance of the business model (and the financial assets held within that business model) and how those risks are managed; and • the frequency, volume and timing of sales in prior periods, the reasons for such sales and its expectations about future sales activity. However, information about sales activity is not considered in isolation, but as part of an overall assessment of how the Bank’s stated objective for managing the financial assets is achieved and how cash flows are realised. Financial assets that are held for trading or managed and whose performance is evaluated on a fair value basis are measured at FVTPL, because they are neither held to collect contractual cash flows nor held both to collect contractual cash flows and to sell financial assets.

Solely Payments of principle and interest (SPPI)

Under IFRS 9, the SPPI test requires that the contractual terms of the financial asset (as a whole) give rise to cash flows that are solely payments of principal and interest on the principal amounts outstanding i.e. cash flows that are consistent with a basic lending arrangement.

For the purposes of this assessment, ‘principal’ is defined as the fair value of the financial asset on initial recognition. ‘Interest’ is defined as consideration for the time value of money and for the credit risk associated with the principal amount outstanding during a particular period of time and for other basic lending risks and costs (e.g. Liquidity risks and administrative cost), as well as profit margin.

148 Notes to the Financial Statements for the Year Ended 30 June 2019 (continued)

3. ACCOUNTING POLICIES (CONT’D) Financial Statements

(a) Financial Instruments (Cont’d)

Policy applicable as from 1 July 2018 (Cont’d)

Solely Payments of principle and interest (SPPI) (Cont’d)

In assessing whether the contractual cash flows are solely payments of principal and interest, the Bank considers the contractual terms of the instrument. This includes assessing whether the financial asset contains a contractual term that could change the timing or amount of the contractual cash flows such that it would meet this condition. In making the assessment, the Bank considers:

• contingent events that would change the amount and timing of cash flows; • leverage features; • prepayment and extension terms; • terms that limit the Bank’s claim to cash flows from specified assets (eg. non –recourse arrangement); and • features that modify consideration of the time value of money – eg. periodical reset of interest rates. Financial assets measured at amortised cost

A debt instrument is measured at amortised cost if it is held within both a business model whose objective is to hold financial assets in order to collect contractual cash flows and its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Financial assets at amortised cost are subsequently measured using the effective interest (EIR) method and are subject to the expected credit loss requirements. Gains and losses are recognised in profit or loss when the asset is derecognised, modified or impaired

The Bank includes in this category:

• Short-term non-financing receivables including accrued income/interest and other receivables. • Cash and cash equivalent, including securities denominated in foreign currency and gold readily convertible into cash. • Short term deposits meeting the definition of cash equivalents. • Loans and advances to commercial banks or other financial institutions under Special Line of Credits and certain other assets of the Bank. • Investment in Government Securities. Financial assets at fair value through OCI (debt instruments)

The Bank measures debt instruments at fair value through OCI if both of the following conditions are met:

• The financial asset is held within a business model with the objective of both holding to collect contractual cash flows and selling financial assets; and • The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

For debt instruments at fair value through OCI, interest income, foreign exchange revaluation and impairment losses or reversals are recognised in the statement of profit or loss and computed in the same manner as for financial assets measured at amortised cost. The remaining fair value changes are recognised in OCI. Upon derecognition, the cumulative fair value change recognised in OCI is recycled to profit or loss.

149 Notes to the Financial Statements for the Year Ended 30 June 2019 (continued)

Financial Statements 3. ACCOUNTING POLICIES (CONT’D)

(a) Financial Instruments (Cont’d)

Policy applicable as from 1 July 2018 (Cont’d)

Financial assets at fair value through OCI (debt instruments) (Cont’d)

The Bank’s debt instruments at fair value through OCI includes quoted debt instruments under its internally managed portfolio.

Financial assets designated at fair value through OCI (equity instruments)

Upon initial recognition, the Bank can elect to classify irrevocably its equity investments as equity instruments designated at fair value through OCI when they meet the definition of equity under IAS 32 Financial Instruments: Presentation and are not held for trading. The classification is determined on an instrument-by instrument basis.

Gains and losses on these financial assets are never recycled to profit or loss. Dividends are recognised as other income in the statement of profit or loss when the right of payment has been established, except when the Bank benefits from such proceeds as a recovery of part of the cost of the financial asset, in which case, such gains are recorded in OCI. Equity instruments designated at fair value through OCI are not subject to impairment assessment.

Financial assets measured at fair value through profit or loss (FVTPL)

A financial asset is measured at fair value through profit or loss if:

• Its contractual terms do not give rise to cash flows on specified dates that are solely payments of principal and interest (SPPI) on the principal amount outstanding; or • It is not held within a business model whose objective is either to collect contractual cash flows, or to both collect contractual cash flows and sell; or • It is classified as financial asset held for trading for the purpose of selling or repurchasing in the near term; or • At initial recognition, it is irrevocably designated as measured at FVTPL when doing so eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise from measuring assets or liabilities or recognising the gains and losses on them on different bases; Financial assets at fair value through profit or loss are carried in the statement of financial position at fair value with net changes in fair value recognised in the statement of profit or loss.

The Bank includes in this category:

• equity instruments in unquoted investments. • foreign Investments managed by fund managers • gold deposits • foreign currency notes Initial recognition of financial assets: classification and measurement

The classification of financial assets at initial recognition will depend on their contractual terms and business model as described in note a(i) Classification of financial assets. Financial assets are initially measured at their fair value, except in the case of financial assets recorded at fair value, transaction costs are added to, or subtracted from, this amount. The Bank’s policy is to use settlement date accounting for the recognition of purchases and sales of trading investments, i.e., the date on which the Bank settles the transactions.

150 Notes to the Financial Statements for the Year Ended 30 June 2019 (continued)

3. ACCOUNTING POLICIES (CONT’D) Financial Statements

(a) Financial Instruments (Cont’d)

Policy applicable as from 1 July 2018 (Cont’d)

Subsequent measurement of financial assets

Effective interest rate

Under both IFRS 9 and IAS 39, interest income is recorded using the effective interest rate (EIR) method on all financial instruments measured at amortised cost, financial instruments designated at FVTPL. Interest income on interest bearing financial assets measured at FVOCI under IFRS 9, similarly to interest bearing financial assets classified as available- for-sale or held to maturity under IAS 39 are also recorded by using the EIR method. The EIR is the rate that exactly discounts estimated future cash receipts through the expected life of the financial instrument or, when appropriate, a shorter period, to the net carrying amount of the financial asset.

Subsequent to initial recognition, financial assets are either measured at amortised cost or at fair value.

The Bank classifies its financial assets as subsequently measured under the following classification categories on the basis of both the entity’s business model for managing the financial assets and the contractual cash flow characteristics of the financial asset:

• Financial assets at amortised cost (Debts instruments) • Financial assets at fair value through other comprehensive income (“FVOCI”) with recycling of cumulative gains and losses (debt instruments) • Financial assets designated at fair value through OCI with no recycling of cumulative gains and losses upon derecognition (equity instruments) • Fair value through profit or loss (“FVTPL”) Before 1 July 2018, the Bank classified its financial assets as loans and receivables (amortised cost), FVTPL, available- for-sale or held-to-maturity (amortised cost).

Derecognition

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognised (i.e., removed from the Bank’s statement of financial position) when:

• The rights to receive cash flows from the asset have expired; or • The Bank has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ‘pass-through’ arrangement and either (a) the Bank has transferred substantially all the risks and rewards of the asset, or (b) the Bank has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset. When the Bank has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if, and to what extent, it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the Bank continues to recognise the transferred asset to the extent of its continuing involvement. In that case, the Bank also recognises an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Bank has retained.

Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Bank could be required to repay.

151 Notes to the Financial Statements for the Year Ended 30 June 2019 (continued)

Financial Statements 3. ACCOUNTING POLICIES (CONT’D)

(a) Financial Instruments (Cont’d)

Policy applicable as from 1 July 2018 (Cont’d)

Impairment of financial assets

IFRS 9 replaces the ‘incurred loss’ model in IAS 39 with an ‘expected credit loss’ model.

The Bank recognises an allowance for expected credit losses (ECLs) on all of the following financial instruments that are not measured at FVTPL:

• Financial assets that are debt instruments measured at amortised cost and FVOCI • Loan commitments and financial guarantee contracts issued

ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Bank expects to receive, discounted at an approximation of the original effective interest rate. The expected cash flows will include cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms.

ECLs are recognised in three stages. For credit exposures for which there has not been a significant increase in credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are possible within the next 12-months (a 12-month ECL). For those credit exposures for which there has been a significant increase in credit risk since initial recognition, a loss allowance is required for credit losses expected over the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL).

Definition of default

For internal credit risk management purposes, the Bank considers a financial asset in default and therefore Stage 3 (credit-impaired) for ECL calculations in accordance with the contractual terms of the financial asset.

For foreign investment assets:

• “A missed or delayed disbursement of a contractually-obligated interest or principal payment as defined in credit agreements and indentures; • A bankruptcy filing or legal receivership by the debt issuer or obligor that will likely cause a miss or delay in future contractually-obligated debt service payments; • A distressed exchange whereby: 1) an issuer offers creditors new or restructured debt, or a new package of securities, cash or assets, that amount to a diminished value relative to the debt obligation’s original promise and 2) the exchange has the effect of allowing the issuer to avoid a likely eventual default; • A change in the payment terms of a credit agreement or indenture imposed by the sovereign that results in a diminished financial obligation, such as a forced currency or re-denomination (imposed by the debtor, or the debtor’s sovereign) or a forced change in some other aspect of the original promise, such as indexation or maturity.” If any of those criteria are met, the asset is moved to stage 3.

The Bank considers treasury and interbank balances in default when the required intraday payments are not settled by the close of business, as outlined in the individual agreements.

152 Notes to the Financial Statements for the Year Ended 30 June 2019 (continued)

3. ACCOUNTING POLICIES (CONT’D) Financial Statements

(a) Financial Instruments (Cont’d)

Policy applicable as from 1 July 2018 (Cont’d)

Significant increase in credit risk

In assessing whether the credit risk on a financial asset has increased significantly since initial recognition, the Bank compares the risk of a default occurring on the financial asset as at the reporting date with the risk as at the date of initial recognition. The Bank considers many factors when assessing a financial asset for a significant increase in credit risk, including

- an actual or expected significant deterioration in the financial asset’s credit rating; - significant deterioration in external market indicators of credit risk for a financial asset (e.g., a significant increase in the credit spread, or the length of time or the extent to which the fair value of a financial asset has been less than its amortized cost); - existing or forecast adverse changes in business, financial or economic conditions that are expected to cause a significant decrease in the counterparty’s ability to meet its debt obligations; - an actual or expected significant deterioration in the operating results of the counterparty; - significant increases in credit risk on other financial instruments of the same counterparty; or an actual or expected significant adverse change in the regulatory, economic or technological environment of the counterparty that results in a significant decrease in the counterparty’s ability to meet its debt obligations.

For foreign investment, the Bank considers that there has been a significant increase in credit risk when:

• If the rating of the financial asset is ‘investment grade’ at initial recognition, a significant increase in credit risk is identified if it downgrades to ‘speculative grade’. The financial asset will be moved to stage 2. • If the rating of the financial asset is ‘speculative grade’ at initial recognition, an increase in credit risk is identified if there is a one notch downgrade in credit rating. The financial asset will be moved to stage 2.

The Bank considers that the asset has cured: If the asset moves one notch upwards in credit rating after being downgraded, then the bank would monitor the coupon payments due in the year. If no coupon payments are missed, then it would move the bond back to stage 1.

If the asset’s credit rating does not move after being moved to stage 2, then the bank would need to obtain the next twelve coupon payments for asset with quarterly coupon payments, the next six coupon payments for asset with semi- annual coupon payments, the next three coupon payments for assets with yearly coupon payments before moving the asset back to stage 1.

Inputs into measurement of ECLs

The key inputs into the measurement of ECL are the term structures of the following variables:

• Probability of default (PD) • Loss given default (LGD) • Exposure at default (EAD)

PD are estimates at a certain date that are based on a mix of internally compiled data, rating agency outputs and expert judgement, comprising both quantitative and qualitative factors.

LGD is the estimated percentage of exposure that will be lost at the time of default.

EAD represents the amount of exposure that the Bank is exposed if there is a default.

153 Notes to the Financial Statements for the Year Ended 30 June 2019 (continued)

Financial Statements 3. ACCOUNTING POLICIES (CONT’D)

(a) Financial Instruments (Cont’d)

Policy applicable as from 1 July 2018 (Cont’d)

Forward looking information

In its ECL models, the Bank relies on credit ratings from credit rating agencies (Standard & Poor’s (S&P), Moody’s, Fitch Group) and the Bloomberg indices rating on global fixed income for the probability of default component. Credit ratings are a tool, among others, that investors can use when making decisions about purchasing bonds and other fixed income investments. They express independent opinions on creditworthiness, using a common terminology that may help investors make more informed investment decisions.

As part of their ratings analysis, the external credit agencies evaluate current and historical information and also assess the potential impact of a broad range of forward looking information, such as:

• Industry specific risk and broad economic factors that may affect the business cycle. • Key performance indicators • Economic, regulatory and geopolitical influences • Management and corporate governance attributes • Competitive position.

Additionally, for Sovereign or national government, the analysis may take into consideration:

• Fiscal and Economic performance • Monetary Stability • Effectiveness of the Government’s institutions.

The inputs and models used for calculating ECLs may not always capture all characteristics of the market at the date of the financial statements. To reflect this, qualitative adjustments or overlays may be made as temporary adjustments when such differences are significantly material.

Write off policy

The Bank writes off a financial asset when there is information indicating that the counterparty is in severe financial difficulty and there is no realistic prospect of recovery. Financial assets written off may still be subject to enforcement activities under the Bank’s recovery procedures. Any recoveries made are recognized in impairment.

Policy before and after 1st July 2018

Offsetting

Financial assets and liabilities are offset and the net amount presented in the statement of financial position when, and only when, the Bank has a legal right to offset the amounts and intends either to settle them on a net basis or to realise the asset and settle the liability simultaneously.

Fair Value Measurement Principles

‘Fair value’ is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date in the principal or, in its absence, the most advantageous market to which the Bank has access at that date. The fair value of liability reflects its non-performance risk.

154 Notes to the Financial Statements for the Year Ended 30 June 2019 (continued)

3. ACCOUNTING POLICIES (CONT’D) Financial Statements

(a) Financial Instruments (Cont’d)

Policy before and after 1st July 2018 (Cont’d)

Fair Value Measurement Principles (Cont’d)

When available, the Bank measures the fair value of an instrument using the quoted price in an active market for that instrument. A market is regarded as active if transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis.

If there is no quoted price in an active market, then the Bank uses valuation techniques that maximise the use of relevant observable inputs and minimise the use of unobservable inputs. The chosen valuation technique incorporates all of the factors that market participants would take into account in pricing a transaction.

The best evidence of the fair value of a financial instrument at initial recognition is normally the transaction price – i.e. the fair value of the consideration given or received. If the Bank determines that the fair value at initial recognition differs from the transaction price and the fair value is evidenced neither by a quoted price in an active market for an identical asset or liability nor based on a valuation technique that uses only data from observable markets, then the financial instrument is initially measured at fair value, adjusted to defer the difference between the fair value at initial recognition and the transaction price. Subsequently, that difference is recognised in profit or loss on an appropriate basis over the life of the instrument but no later than when the valuation wholly supported by observable market data or the transaction is closed out.

The fair value of a demand deposit is not less than the amount payable on demand, discounted from the first date on which the amount could be required to be paid.

The Bank recognises transfers between levels of the fair value hierarchy as of the end of the reporting period during which the change has occurred.

Gold Deposits

Gold Deposits are held by the Bank for reserve management purposes. IAS 39 specifically excludes from its scope gold deposits and therefore IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors, has been considered to assess the most appropriate accounting for the gold deposits. Under IAS 39, gold deposits were classified as a financial asset reported at fair value through profit or loss. The gold deposits do not meet the SPPI test as prescribed in IFRS 9 and are hence classified at fair value through profit or loss. Accordingly, all gains and losses on revaluation of gold are recognised in profit or loss. Gold is valued at the price ruling on the international market.

Gains and Losses on Subsequent Measurement

Gains or losses on FVTPL financial assets and financial liabilities arising from changes in their fair value are recognised in profit or loss in the period in which they arise. For those financial instruments carried at amortised cost, gains or losses are recognised in profit or loss when the financial instrument is de-recognised or impaired and through the amortisation process.

Bank of Mauritius Securities

Bank of Mauritius securities, which are issued for liquidity management, are measured at amortised cost using the straight line method.

Cash and Cash Equivalents

Cash and cash equivalents comprise cash in hand, gold deposits, cash balances, call deposits with other financial institutions and short-term highly liquid debt investments with maturity of three months or less from date of acquisition.

155 Notes to the Financial Statements for the Year Ended 30 June 2019 (continued)

Financial Statements 3. ACCOUNTING POLICIES (CONT’D)

(a) Financial Instruments (Cont’d)

Policy before and after 1st July 2018 (Cont’d)

Other Balances and Placements

Other balances and placements comprise balances with more than three months’ maturity from the date of acquisition, including deposits held with banks abroad.

(b) Computer Software

Under IAS 38 Intangible assets, Computer Software which does not form an integral part of computer hardware, is classified as an intangible asset. Intangible assets are stated at cost, net of accumulated amortisation and any accumulated impairment losses. Amortisation is provided on a straight-line basis at the rate of 33 1/3% per annum so as to write off the depreciable value of the assets over their estimated useful lives. A full year of amortisation is charged in the year of purchase. Depreciation methods, useful lives and residual values if not insignificant, are reviewed at each reporting date and adjusted as appropriate.

(c) Property, Plant and Equipment

Recognition and Measurement

Items of property and equipment are measured at cost less accumulated depreciation and any accumulated impairment losses. Purchased software that is integral to the functionality of the related equipment is capitalised as part of that equipment.

If significant parts of an item of property or equipment have different useful lives, then they are accounted for as separate items (major components) of property and equipment.

Any gain or loss on disposal of an item of property and equipment (calculated as the difference between the net proceeds from disposal and the carrying amount of the item) is recognised within miscellaneous income in profit or loss.

Subsequent expenditure is capitalised only when it is probable that the future economic benefits of the expenditure will flow to the Bank. Ongoing repairs and maintenance are expensed as incurred.

Depreciation

Depreciation is calculated to write off the cost of items of property and equipment less their estimated residual values using the straight-line method over their estimated useful lives (except for motor vehicles which are depreciated as stated below), and is generally recognised in profit or loss. Freehold land and capital work in progress are not depreciated.

Depreciation is provided at the following annual percentage rates:

Buildings - 2% Furniture, Equipment, Fixtures and Fittings - 10% Computer Equipment, Cellular Phones and ICT Systems - 33 1/3% Motor Vehicles - 40% for 1st year then 20% for each of the three subsequent years Depreciation methods, useful lives and residual values if not insignificant, are reviewed at each reporting date and adjusted as appropriate.

156 Notes to the Financial Statements for the Year Ended 30 June 2019 (continued)

3. ACCOUNTING POLICIES (CONT’D) Financial Statements

(d) Industrial Gold, Dodo Gold Coins and Gold Bars

Inventories of Industrial Gold, Dodo Gold Coins and Gold Bars are measured at the lower of cost and net realisable value. The costs of inventories are based on a first-in-first-out principle and include all expenditure incurred in acquiring the inventories and in bringing them to their existing location and condition.

Net realisable value is the estimated selling price in the ordinary course of business less the estimated selling expenses.

(e) Currency in Circulation

Notes and coins issued represent an unserviced liability of the Bank and are recorded at face value. The costs of minting coins are amortised in the profit and loss account over three years while that of printing banknotes are amortised over two years.

The Bank also issues a range of Mauritius commemorative coins. All costs associated with the production of these numismatic coins are expensed in profit or loss when incurred.

(f) Employee Benefits

Defined Benefit Pension Plan

The Bank’s net obligation in respect of defined benefit plans is calculated by estimating the amount of future benefit that employees have earned in the current and prior periods, discounting that amount and deducting the fair value of any plan assets.

The calculation of defined benefit obligations is performed annually by a qualified actuary. Currently, the Bank employs the State Insurance Company of Mauritius as its actuary. When the calculation results in a potential asset for the Bank, the recognised asset is limited to the present value of economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan. To calculate the present value of economic benefits, consideration is given to any applicable minimum funding requirements.

Remeasurement of the net defined benefit liability, which comprise actuarial gains and losses, the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognised immediately in OCI. The Bank determines the net interest expense (income) on the net defined benefit liability (asset) for the period by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the then-net defined benefit liability (asset), taking into account any changes in the net defined benefit liability (asset) during the period as a result of contributions and benefit payments. Net interest expense and other expenses related to defined benefit plans are recognised in “Staff Salaries and Other Benefits” in profit or loss.

When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service or the gain or loss on curtailment is recognised immediately in profit or loss. The Bank recognises gains and losses on the settlement of a defined benefit plan when the settlement occurs.

Short-term employee benefits

Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided. A liability is recognised for the amount expected to be paid under short-term cash bonus or profit- sharing plans if the Bank has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

Termination Benefits

Termination benefits are expensed at the earlier of when the Bank can no longer withdraw the offer of those benefits. If benefits are not expected to be settled wholly within 12 months at the end of the reporting period, then they are discounted. 157 Notes to the Financial Statements for the Year Ended 30 June 2019 (continued)

Financial Statements 3. ACCOUNTING POLICIES (CONT’D)

(f) Employee Benefits (cont’d)

State Pension Plan

Contribution to the National Pension Scheme is expensed to profit or loss in the period in which it falls due.

(g) Income and Expenditure Recognition

Income and Expenditure are recognised as they are earned or incurred and are recorded in the financial statements on an accruals basis to accurately reflect the period to which they relate.

Dividend income from equity investments is accounted for in profit or loss as “Interest and Similar Income” when the right to receive payment is determined.

Interest income and expense are recognised in profit or loss using the effective interest rate method. The effective interest rate is the rate that exactly discounts the estimated future cash payments and receipts through the expected life of the financial asset or liability (or, where appropriate, a shorter period) to the carrying amount of the financial asset or liability.

The calculation of the effective interest rate includes all transaction costs and fees and points paid or received that are an integral part of the effective interest rate. Transaction costs include incremental costs that are directly attributable to the acquisition or issue of a financial asset or liability.

Interest income and expense presented in the statement of profit or loss and other comprehensive income include:

• interest on financial assets and liabilities measured at amortised cost calculated on an effective interest basis; • fair value changes on other financial assets and liabilities carried at fair value through profit or loss, are presented in gain or loss from financial instruments carried at fair value through profit or loss.

(h) Foreign Currencies

Transactions in foreign currencies are recorded in Mauritian Rupees using the rate of exchange ruling at the date of the transactions. Monetary assets and liabilities denominated in foreign currencies are translated in Mauritian Rupees using the rate of exchange ruling at the reporting date. Foreign exchange differences arising on translation are included in profit or loss in accordance with IAS 21 (The Effects of Changes in Foreign Exchange Rates). However, for the purpose of determining the net profits of the Bank in terms of section 11 of the Bank of Mauritius Act 2004, foreign exchange differences are excluded in accordance with section 47(2) of the Act. Non-monetary assets and liabilities denominated in foreign currencies, which are stated at historical cost, are translated at the foreign exchange rate ruling at the date of the transactions.

(i) Impairment

The carrying amounts of the Bank’s non-financial assets are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists then the asset’s recoverable amount is estimated. An impairment loss is recognised if the carrying amount of an asset or cash-generating unit (CGU) exceeds its recoverable amount.

The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU.

An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.

158 Notes to the Financial Statements for the Year Ended 30 June 2019 (continued)

3. ACCOUNTING POLICIES (CONT’D) Financial Statements

(j) Provisions

Provisions are recognised when the Bank has a present obligation as a result of a past event, and it is probable that the Bank will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

Provisions are determined by the Bank through their best estimate of the expenditure required to settle the obligation at the reporting date. These are calculated by discounting the expected future cash flows at a rate that reflects current market assessments of the time value of money and the risks specific to the liability. Provisions are reviewed at each reporting date and adjusted to reflect the current best estimate.

(k) Operating Leases

Operating lease payments are recognised as an expense on a straight line basis over the lease term, except where another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed. Contingent rentals arising under operating leases are recognised as an expense in the period in which they are incurred.

In the event that lease incentives are received to enter into operating leases, such incentives are recognised as a liability. The aggregate benefit of incentives is recognised as a reduction of rental expense on a straight line basis, except where another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

4. USES OF ESTIMATES AND JUDGEMENT

The preparation of financial statements in accordance with IFRS requires management to exercise judgement in the process of applying the accounting policies. It also requires the use of accounting estimates and assumptions that may affect the reported amounts and disclosures in the financial statements. Judgements and estimates are continuously evaluated and are based on historical experience and other factors, including expectations and assumptions concerning future events that are believed to be reasonable under the circumstances. The actual results could, by definition therefore, often differ from the related accounting estimates.

Particular areas where management has applied a higher degree of judgement that have a significant effect on the amounts recognised in the financial statements, or estimations and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are as follows:

Determining Fair Values

The determination of fair value for financial assets and liabilities for which there is no observable market price requires the use of valuation techniques as described in accounting policy 3 (a). For financial instruments that trade infrequently and have little price transparency, fair value is less objective, and requires varying degrees of judgement depending on liquidity, concentration, uncertainty of market factors, pricing assumptions and other risks affecting the specific instrument.

Employee Benefits

The present value of the employee benefits, consisting of gratuity and compensation, depends on a number of factors that are determined on an actuarial basis using a number of assumptions. Any changes in these assumptions will impact the carrying amount of the employee benefit obligations.

The main assumption used in determining the net cost or income for employee benefits is the discount rate. The Bank determines the appropriate discount rate at the end of each year. This is the interest rate that should be used to determine the present value of estimated future cash outflows expected to be required to settle the employee benefit obligations.

159 Notes to the Financial Statements for the Year Ended 30 June 2019 (continued)

Financial Statements 4. USES OF ESTIMATES AND JUDGEMENT (CONT’D)

Employee Benefits (Cont’d)

In determining the appropriate discount rate, the Bank considers the interest rates of high-quality corporate bonds or its equivalent that are denominated in the currency in which the benefits will be paid and that have terms to maturity approximating the terms of the related liability. Details of the defined benefit obligation are disclosed in Note 16.

Determination of Functional Currency

Functional currency is the currency of the primary economic environment in which the Bank operates. When indicators of the primary economic environment are mixed, management uses its judgment to determine the functional currency that most faithfully represents the economic effect of the underlying transactions, events and conditions. Management has determined that the functional currency of the Bank is Mauritian Rupees (“Rs”) as majority of the Bank’s transactions, operating expenses and liabilities are denominated in Mauritian Rupees.

Calculation of Expected Credit Loss

Impairment under IFRS 9 adopts a staging approach, with stage 1 representing the lowest credit risk and stage 3 the highest. When a new asset is originated it is classified in stage 1 (normal origination). Moving from stage 1 to stage 2 is a judgement, and is based on management defined criteria of whether there is a significant increase in credit risk. Given the impact of ECL on the Bank’s financial statement, this is not considered to be a significant judgement.

When measuring ECL, the Bank uses reasonable and supportable forward-looking information, which is based on assumptions for the future movement of different economic drivers and how the drivers will affect each other as described in details in Note 2(e).

Probability of default (PD) is an estimate of the likelihood of default over a given time horizon, the calculation of which includes historical data, assumptions and expectations of future conditions as described in details in Note 2(e).

Loss given default (LGD) is an estimate of the loss arising on default. It is based on the difference between the contractual cash flows due and those that the Bank would expect to receive, taking into account cash flows from credit enhancements.

Actual loss experience may differ from changes in estimated forward looking information and economic drivers.

5. CAPITAL AND RESERVES

Stated and Paid up Capital

The stated and paid up capital of the Bank is Rs2 billion in accordance with section 10(4) of the Bank of Mauritius Act 2004. All amounts paid as Capital are subscribed and held solely by the Government of Mauritius (refer to Note 1).

General Reserve Fund

The General Reserve Fund is a reserve fund created in accordance with section 11(2) of the Bank of Mauritius Act 2004 (refer to Note 1).

160 Notes to the Financial Statements for the Year Ended 30 June 2019 (continued)

5. CAPITAL AND RESERVES (CONT’D) Financial Statements

Special Reserve Fund

In terms of section 47(1) of the Bank of Mauritius Act 2004, the Special Reserve Fund is a reserve built up from any net realised gains or losses in any financial year of the Bank arising from changes in the valuation of its assets or liabilities in, or denominated in gold, SDR, or foreign currencies subsequent to any change in the values or exchange rates of gold, SDR, or foreign currencies in terms of the domestic currency.

Section 47(1A) of the Bank of Mauritius Act 2004 introduced in December 2011 provides that any unrealised gains or losses of the Bank in any financial year arising from changes in the valuation of investments held by the Bank shall be credited to or debited from the Special Reserve Fund.

As per section 47(2) of the Bank of Mauritius Act 2004, neither net gains nor net losses in any financial year of the Bank arising from changes in the valuation of its assets or liabilities in, or denominated in gold, Special Drawing Rights, or foreign currencies shall be included in the computation of annual income of the Bank.

6. CASH AND CASH EQUIVALENTS

2019 2018 Rs Rs Short term deposits 6,252,899,009 4,121,190,593 Special Drawing Rights 4,438,060,895 4,376,335,357 Current Accounts 42,318,400,478 19,757,460,830 Foreign Currency Notes 6,499,621 20,428,884 Foreign Investments - 15,135,309,943 53,015,860,003 43,410,725,607

7. FINANCIAL ASSETS HELD AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME

2019 2018 Rs Rs Foreign Investments 84,187,133,749 78,497,633,490 Loss Allowance (33,645,789) - 84,153,487,960 78,497,633,490

8. FINANCIAL ASSETS HELD AT FAIR VALUE THROUGH PROFIT OR LOSS

2019 2018 Rs Rs Foreign Investments 95,152,906,113 89,955,618,282 Other Investment 1,064,439,155 912,192,125 96,217,345,268 90,867,810,407

Foreign Investments include funds entrusted to Fund Managers and investment in foreign currency denominated securities and bonds. Other investments have been valued on the basis of the latest net asset value in respect of the investee entities.

161 Notes to the Financial Statements for the Year Ended 30 June 2019 (continued)

Financial Statements 9. (a) DOMESTIC FINANCIAL ASSETS HELD AT AMORTISED COST

2019 2018 Rs Rs Special Line of Credit in Foreign Currency 253,159,496 478,025,981 Special Line of Credit in Local Currency 3,887,384,573 3,792,570,315 Government Securities 324,785,421 - Staff Loans 104,240,406 88,122,365 Net Balances due in Clearing 35,841,468 53,870,202 Others 26,220,984 25,038,017 4,631,632,348 4,437,626,880 Loss Allowances: Special Line of Credit in Foreign Currency (10,911) - Special Line of Credit in Local Currency (15,147) - Government Securities (54,824) - Staff Loans (48,743) - (129,625) - 4,631,502,723 4,437,626,880

Under the implementation of IFRS 9, the Bank has reclassified the investment in Government of Mauritius Bonds amounting to Rs654,928,248 from fair value through profit or loss to amortised cost as at 1 July 2018. Although these bonds were acquired with the intent of trading, in practice it was held to collect interest income and there was no trading during the past years. These bonds are best classified as being in a business model of hold to collect and they meet the SPPI test. The reclassification and resulting amortisation adjustment amounting to Rs17,340,981 is detailed in Note 2(e) as per Application of IFRS 9 Transition Disclosure Table.

Advances under Special Lines of Credit are granted to banks and other economic operators to support the economic development of the country. These advances are guaranteed/collateralised and are at fixed and variable interest rates. Net balances due in clearing are cheques collected and outstanding at close of business and which were cleared on the next working day.

(b) The following table explain the changes in the loss allowances between the beginning and the end of the year.

Stage 1 Stage 2 Stage 3 12 – month Life time ECL Life time ECL ECL Collective Collective Individual basis basis basis Total Rs Rs Rs Rs Impact of IFRS 9 - 1 July 2018 28,735,477 - - 28,735,477 Movements with P & L impact Foreign exchange translation 217,493 - - 217,493 Changes to risk parameters (model inputs) 7,421,353 - - 7,421,353 Financial assets derecognised - Disposals (8,554,631) - - (8,554,631) New financial assets 2,959,910 2,995,812 - 5,955,722 Loss allowance charge for the year 2,044,125 2,995,812 - 5,039,937 Loss allowance as at 30 June 2019 30,779,602 2,995,812 - 33,775,414

162 Notes to the Financial Statements for the Year Ended 30 June 2019 (continued)

10. COMPUTER SOFTWARE Financial Statements

COST Rs At 1 July 2017 235,984,472 Additions 1,473,112 Transfer from WIP 7,846,948 At 30 June 2018 245,304,532 Additions 2,598,044 At 30 June 2019 247,902,576 ACCUMULATED AMORTISATION At 1 July 2017 195,815,931 Charge for the year 38,546,336 At 30 June 2018 234,362,267 Charge for the year 3,555,506 At 30 June 2019 237,917,773 NET BOOK VALUE At 30 June 2019 9,984,803 At 30 June 2018 10,942,265

The Directors have reviewed the carrying values of intangible assets and are of the opinion that at 30 June 2019, the carrying values have not suffered any impairment.

163 Notes to the Financial Statements for the Year Ended 30 June 2019 (continued)

Financial Statements 11. PROPERTY, PLANT AND EQUIPMENT

Furniture, Equipment, Land and Capital Work in Fixtures and Computer Motor Buildings Progress Fittings Equipment Vehicles Total Rs Rs Rs Rs Rs Rs COST At 1 July 2017 1,625,701,618 372,264,453 684,730,419 148,275,976 29,089,003 2,860,061,469 Additions 358,051 160,819,580 5,045,974 18,346,232 5,360,547 189,930,384 Transfer 294,431,805 (494,327,745) 170,191,357 29,704,583 - - Scrapped - - (59,383) (197,100) - (256,483) Disposals - - - (1,196,310) (5,325,950) (6,522,260) At 30 June 2018 1,920,491,474 38,756,288 859,908,367 194,933,381 29,123,600 3,043,213,110 Additions 7,324,588 71,114,183 31,022,597 13,768,079 7,455,000 130,684,447 Transfer - (28,409,704) 28,407,704 - 2,000 - Scrapped - - (670,687) (243,637) - (914,324) Disposal - - (61,620) - (7,002,000) (7,063,620) At 30 June 2019 1,927,816,062 81,460,767 918,606,361 208,457,823 29,578,600 3,165,919,613

ACCUMULATED DEPRECIATION At 1 July 2017 291,274,732 - 660,196,060 127,176,000 23,126,643 1,101,773,435 Charge for the year 35,475,530 - 26,616,280 30,076,804 5,340,899 97,509,512 Scrapped - - (59,381) (196,600) - (255,981) Disposals - - - (1,195,810) (5,322,950) (6,518,760) At 30 June 2018 326,750,262 - 686,752,959 155,860,394 23,144,592 1,192,508,206 Charge for the year 35,622,020 - 26,886,334 28,282,769 6,810,589 97,601,712 Scrapped - - (85,261) (81,204) - (166,465) Disposals - - (61,619) - (7,001,000) (7,062,619) At 30 June 2019 362,372,282 - 713,492,413 184,061,959 22,954,181 1,282,880,834

CARRYING AMOUNT At 30 June 2019 1,565,443,780 81,460,767 205,113,948 24,395,864 6,624,419 1,883,038,779

At 30 June 2018 1,593,741,212 38,756,288 173,155,410 39,072,990 5,979,008 1,850,704,908

The Directors have reviewed the carrying values of tangible assets and are of the opinion that at 30 June 2019, the carrying values have not suffered any impairment.

164 Notes to the Financial Statements for the Year Ended 30 June 2019 (continued)

12. OTHER ASSETS Financial Statements

2019 2018 Rs Rs

Prepayments 37,913,364 103,526,363 Industrial Gold and Dodo Gold Coins 100,032,238 95,567,174 Gold Bars 142,073,879 132,076,385 Others 18,467,988 19,053,934 298,487,469 350,223,856

13. CURRENCY IN CIRCULATION

2019 2018 Rs Rs Notes issued Face value 2,000 2,914,812,000 3,354,724,000 1,000 22,927,987,000 21,257,033,000 500 4,703,872,500 4,185,475,000 200 1,884,659,200 1,764,102,200 100 1,687,166,400 1,607,918,300 50 400,622,050 369,096,950 25 273,301,550 274,694,175 Demonetised Notes 499,242,510 214,247,160 Total 35,291,663,210 33,027,290,785

Coins issued Face value 20 rupees 243,037,980 220,044,220 10 rupees 373,711,090 350,320,450 5 rupees 170,241,810 159,084,525 1 rupee 197,821,752 186,555,947 50 cents 42,260,398 40,237,254 25 cents ** 6,327,358 6,327,843 20 cents 52,490,580 50,516,723 10 cents ** 2,417,154 2,417,348 5 cents 12,531,804 11,954,921 2 cents ** 330,228 330,248 1 cent 222,965 222,995 Others*** 22,675,053 22,585,583 Total 1,124,068,172 1,050,598,057

Total face value of Notes and Coins in Circulation 36,415,731,382 34,077,888,842

** These denominations have ceased to be issued by the Bank. *** Others include Gold Coins and Commemorative Coins.

165 Notes to the Financial Statements for the Year Ended 30 June 2019 (continued)

Financial Statements 14. MONETARY POLICY INSTRUMENTS

2019 2018 Rs Rs Bank of Mauritius Savings Bonds 907,400 907,400 Bank of Mauritius Bonds 481,424,644 479,504,977 Bank of Mauritius Notes 33,938,075,444 26,970,932,828 Bank of Mauritius Bills 58,948,102,261 35,415,959,117 Bank of Mauritius Golden Jubilee Bonds 8,974,425,000 8,974,425,000 Special Deposits from banks 12,755,500,000 19,774,600,000 Interest Payable 395,830,721 494,291,342 115,494,265,470 92,110,620,664

15. PROVISIONS

2019 2018 Rs Rs Balance at 30 June 100,000,000 100,000,000

The provision relates to the liquidation of the MCCB Limited. Under the MCCB Limited (Liquidation) Act 1996, the Bank may make additional funds available to the liquidator of MCCB Limited where the liabilities of the MCCB Limited exceed the proceeds from the realisation of its assets. The liquidation of MCCB Limited is still in progress.

16. EMPLOYEE BENEFITS

Amounts recognised in the Statement of Financial Position: 2019 2018 Rs Rs Defined Benefit Plan (Note (a)) 673,353,437 653,689,895 Short Term Employee Benefits (Note (b)) 128,634,098 123,565,131 801,987,535 777,255,026

(a) Defined Benefit Plan

The Bank operates a defined benefit plan for its employees who joined the Bank prior to January 2013 and the plan is wholly funded. The assets of the funded plan are held independently and are administered by The State Insurance Company of Mauritius Ltd.

The plan is exposed to risks such as: investment risk, interest rate risk, longevity risk, and salary risk.

The report dated 1 August 2019 submitted by The State Insurance Company of Mauritius Ltd, who also acts as independent actuaries, is produced hereunder.

Amounts recognised in profit or loss: 2019 2018 Rs Rs Current Service Cost 27,510,943 25,976,467 Employee Contributions (10,710,913) (12,033,360) Fund Expenses 799,706 844,816 Net interest expense 40,310,526 61,520,531 Net Periodic Pension Cost included in Staff Salaries and other benefits 57,910,262 76,308,454

Remeasurement of defined benefit liability recognised in Other Comprehensive Income (OCI): Actuarial (gain)/loss (8,292,784) 169,018,362

166 Notes to the Financial Statements for the Year Ended 30 June 2019 (continued)

16. EMPLOYEE BENEFITS (CONT’D) Financial Statements

(a) Defined Benefit Plan (Cont’d)

Movements in liability recognised in the Statement of Financial Position:

2019 2018 Rs Rs At start of the year 653,689,895 985,995,490 Total Expenses as per above 57,910,262 76,308,454 Past Service Liability Contribution - (547,100,000) Actuarial Gain/ Loss recognised in OCI (8,292,784) 183,029,373 Fair Value Gain - (14,011,011) Bank of Mauritius share of pension (topping-up) (324,981) (324,981) Employer Contributions (29,628,955) (30,207,430) At end of the year 673,353,437 653,689,895

Movements in the present value of the Defined Benefit Obligations in the current period were as follows:

2019 2018 Rs Rs At start of the year 1,481,355,530 1,283,182,894 Current Service Cost 27,510,943 25,976,467 Interest Cost 88,881,332 83,406,889 Actuarial loss 1,130,350 170,663,999 Benefits Paid (76,169,540) (81,874,719) At end of the year 1,522,708,615 1,481,355,530

Movements in the fair value of the Plan Assets in the current period were as follows:

2019 2018 Rs Rs At start of the year 827,665,635 297,187,404 Fair Value Gain - 14,011,011 Expected Return on Plan Assets 48,570,806 21,886,358 Actuarial Gain/(Loss) 9,423,134 (12,365,374) Contributions from the Employer 29,628,955 30,207,430 Employee Contributions 10,710,913 12,033,360 Past Service Liability Contribution - 547,100,000 Bank of Mauritius Share of Pension 324,981 324,981 Benefits Paid (Excluding BOM share of pension) (76,169,540) (81,874,719) Fund Expenses (799,706) (844,816) At end of the year 849,355,178 827,665,635

The amount included in the Statement of Financial Position arising from the Bank’s obligation in respect of its defined benefit plans is as follows:

2019 2018 Rs Rs Present Value of Defined Benefit Obligation 1,522,708,615 1,481,355,530 Fair Value of Plan Assets (849,355,178) (827,665,635) Net Liability arising from Defined Benefit Obligation 673,353,437 653,689,895

16. EMPLOYEE BENEFITS (CONT’D)

167 Notes to the Financial Statements for the Year Ended 30 June 2019 (continued) Financial Statements (a) Defined Benefit Plan (Cont’d)

The major categories of plan assets at the reporting date are as follows:

30 JUNE 2019 30 June 2018 Major categories of Plan Assets % %

Local Equities 13.4 15.7 Overseas Equities and Bonds 20.7 22.2 Fixed Interest Securities and Cash 61.7 57.7 Others 4.2 4.4

The overall expected rate of return on Plan Assets is determined by reference to market yields on bonds. The actual return on plan assets was Rs38.2 million (2018: Rs9.5 million).

The history of experience adjustments is as follows: - 2019 2018 Rs Rs Experience losses on plan liabilities (1,130,350) (170,663,999) Experience gains/(losses) on plan assets 9,423,134 (12,365,374) 8,262,784 (183,029,373)

The Bank expects to make a contribution of Rs29.4 million (2018: Rs26.2 million) to the defined benefit plans during the next financial year. This estimate may be amended by the Bank of Mauritius on the basis of availability of more accurate information.

Additional disclosure on assets issued or used by the reporting entity

2019 2018 % % Percentage of assets at end of year Assets held in the entity’s own financial instruments 0 0 Property occupied by the entity 0 0 Other assets used by the entity 0 0

Weighted average duration of the defined benefit obligation (Calculated as a % change in PV of liabilities for a 1% change in discount rate) 12 years

The principal assumptions used for actuarial valuation were: 2019 2018 Discount Rate 6.0% 6.5% Future Long-term Salary Increases 4.0% 4.0% Future Pension Increases 3.5% 3.5%

Mortality before retirement A 6770 Ultimate Tables Mortality in retirement PA (90) Tables rated down by 2 years Retirement age As per Second Schedule of the Statutory Bodies Pension Funds Act

The discount rate is determined by reference to market yields on bonds.

168 Notes to the Financial Statements for the Year Ended 30 June 2019 (continued)

16. EMPLOYEE BENEFITS (CONT’D) Financial Statements

(a) Defined Benefit Plan (Cont’d)

Significant actuarial assumptions for determination of the defined benefit obligation are discount rate, expected salary increase and mortality. The sensitivity analyses below have been determined based reasonably on possible changes of the assumptions occurring at the end of the reporting period.

If the discount rate would be 100 basis points (one percent) higher (lower), the defined benefit obligation would decrease by Rs161.7 million (increase by Rs196 million) if all other assumptions were held unchanged.

If the expected salary growth would increase (decrease) by 1%, the defined benefit obligation would increase by Rs63.5 million (decrease by Rs56.8 million) if all other assumptions were held unchanged.

If the expected pension growth would increase (decrease) by 1%, the defined benefit obligation would increase by Rs119.2 million (decrease by Rs103 million) if all other assumptions were held unchanged.

If life expectancy would increase (decrease) by one year, the defined benefit obligation would increase by Rs49 million (decrease by Rs49 million) if all other assumptions were held unchanged.

In reality one might expect interrelationships between the assumptions, especially between discount rate and expected salary increases, given that both depends to a certain extent on expected inflation rates. The analysis above abstracts from these interdependences between the assumptions.

(b) Short Term Employee Benefits

2019 2018 Rs Rs Provision for Annual and Sick Leaves 75,362,823 73,074,065 Provision for Passage Benefits 53,271,275 50,491,066 128,634,098 123,565,131

(c) Employer Contribution towards Pension Cost

2019 2018 Rs Rs Contributions Expensed (Note 20) 34,880,026 36,112,274

(d) State Pension Plan

2019 2018 Rs Rs National Pension Scheme Contributions (Note 20) 1,569,754 1,548,540

169 Notes to the Financial Statements for the Year Ended 30 June 2019 (continued)

Financial Statements 17. OTHER LIABILITIES

2019 2018 Rs Rs Amount Transferable to Consolidated Fund 71,249,420 - Creditors 462,059,464 153,310,497 Abandoned Funds from Financial Institutions 1,582,655,056 1,433,234,699 Special Drawing Rights (SDR) 3,488,025,037 3,443,980,039 Interests and Charges Payable 130,503,227 99,414,477 Other Deposits 17,043,967 17,043,967 Foreign Bills sent for Collection 19,620 11,284 Others 18,123 18,123 5,751,573,914 5,147,013,086 18. INCOME

(a) Interest Income on Financial Assets using Effective Interest Rate

2019 2018 Rs Rs Fixed Income Securities 1,772,915,335 1,796,149,983 Repurchase Agreement 216,570,969 179,847,193 Loans and Advances 100,477,731 99,281,546 Government Securities 31,093,154 - Special Drawing Rights 45,939,639 31,998,826 Current Accounts 32,819,152 8,880,873 Deposit Accounts (18,882,097) (10,118,603) Realised Loss on Fixed Income Securities (8,835,354) (142,083,605) 2,172,098,529 1,963,956,213

(b) Interest and Similar Income on Financial Assets at Fair Value through Profit or Loss

2019 2018 Rs Rs Government Securities - 21,499,144 Dividend Income from Fund Managers 2,068,388,337 950,650,781 Interest Income from Fund managers 357,727,357 136,257,046 Other Income 45,169,385 48,189,735 2,471,285,079 1,156,596,706

19. (a) MISCELLANEOUS INCOME

2019 2018 Rs Rs Processing and Licence Fees 114,157,977 120,167,616 MACSS & MCIB Fees 78,676,446 69,324,586 Profit/(Loss) on Foreign Exchange Transactions 39,084,721 (40,604,197) Profit on Sale of Property, Plant and Equipment 1,425,498 1,715,312 Penalty 1,000,774 5,000,000 Sponsorship Income 800,000 675,000 Sundry Income 485,099 471,044 Fees and Charges 473,569 678,231 236,104,084 157,427,592 170 Notes to the Financial Statements for the Year Ended 30 June 2019 (continued)

19. (b) GAIN/(LOSS) ON FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS Financial Statements

2019 2018 Rs Rs Foreign Investments 2,254,094,643 (893,801,025) Unquoted Investments 113,403,846 61,978,981 2,367,498,489 (831,822,044)

20. STAFF SALARIES AND OTHER BENEFITS

2019 2018 Rs Rs Staff Salaries and Allowances 370,113,005 375,079,616 Employer Contribution Towards Pension Cost (Note 16(c)) 34,880,026 36,112,274 Staff Family Protection Scheme 7,629,780 11,104,003 National Pension Fund (Note 16(d)) 1,569,754 1,548,540 HRDC Levy 69,253 197,735 414,261,818 424,042,168

The amount of Rs370,113,005 includes an increase in the liability for short term employee benefits amounting to Rs5,068,967 (see Note 16(b)).

21. FEES PAYABLE

The increase in the fees payable to external fund managers is due to the fact only fees for three months (April to June 2018) were charged in respect of the multi asset mandates for the year ended 2018 compared to a full year charge for the year ended 2019.

22. DIRECTORS’ REMUNERATION

2019 2018 Rs Rs Governor 10,374,218 14,132,355 Deputy Governors (2) 12,764,914 11,626,323 Other Directors (5) 1,800,000 1,440,000 24,939,132 27,198,678

Directors are paid a monthly fee of Rs30,000 (2018: Rs30,000).

23. OTHER EXPENDITURE 2019 2018 Rs Rs Stationery and Library 6,413,928 8,809,758 Communication Charges 54,210,929 47,580,801 Others 1,411,327 1,033,782 62,036,184 57,424,341

171 Notes to the Financial Statements for the Year Ended 30 June 2019 (continued)

Financial Statements 24. OPEN MARKET OPERATIONS

The Bank, in the pursuit of its objectives to maintain price stability and to promote orderly and balanced economic development undertakes open market operations to manage liquidity conditions in the domestic money markets. The cost of open market operations conducted through the issue of Bank of Mauritius Securities and Government of Mauritius Treasury Bills (GMTB) for liquidity management and also through special deposits from banks are provided below.

2019 2018 Rs Rs Interest Bank of Mauritius Securities 2,908,524,789 1,938,062,473 Government of Mauritius Treasury Bills - 93,127,852 Special Deposits 558,400,949 336,045,834 3,466,925,738 2,367,236,159

25. RECONCILIATION OF PROFIT TO NET CASH GENERATED FROM OPERATING ACTIVITIES

2019 2018 Note Rs Rs

Net Profit for the Year 8,622,887,780 80,167,362 Adjustments for: Non-Cash Increase in Employee Benefits 33,025,293 56,871,076 Amortisation of Intangible Assets 10 3,555,506 38,546,336 Depreciation of Property, Plant and Equipment 11 97,601,712 97,509,512 Profit on sale of Property, Plant and Equipment 19(a) (1,425,498) (1,715,312) Dividend Received from Other Investment (16,902,811) (7,564,887) Gain on Revaluation of Gold Deposits (2,724,518,858) (143,644,520) (Gain)/Loss on Financial Assets at Fair Value Through Profit or Loss (2,367,498,489) 831,822,044 Gain on revaluation of foreign currencies and SDR (3,455,340,369) (1,043,253,736) Loss Allowance Charge 33,775,414 - Loss on revaluation of Government Securities - 19,060,856 Operating Profit/(Loss) before Working Capital Changes 225,159,680 (72,201,269) Decrease in Interest Receivable - 314,049,488 Decrease in Loans and Advances 461,052,405 88,016,049 Decrease/(Increase) in Other Assets 51,736,387 (27,434,774) Increase in Notes and Coins in Circulation 2,337,842,540 276,854,765 Decrease in Government Demand Deposits (8,394,879,889) (13,251,014,036) (Decrease)/Increase in Banks’ Demand Deposits (5,363,836,524) 28,041,960,122 Increase/(Decrease) in Other Financial Institutions’ Demand Deposits 426,498,732 (80,669,547) Increase/(Decrease) in Other Demand Deposits 202,160,677 (41,166,722) Increase in Bank of Mauritius Securities 23,383,644,806 26,042,627,491 Increase in Other Liabilities 604,560,828 9,502,056,719 Net Cash Generated from Operating Activities 13,933,939,642 50,793,078,286

172 Notes to the Financial Statements for the Year Ended 30 June 2019 (continued)

26. COMMITMENTS AND OTHER CONTINGENCIES Financial Statements

Commitment not otherwise provided for in the financial statements and which existed at 30 June 2019 is as follows:

The Bank has a commitment to pay on call 60% of 1,202 shares for capital subscription in the African Export-Import Bank. This amount has not been accounted for as a liability in the financial statements.

Other capital commitments at reporting date amounted to Rs35 million (2018: Rs65.3 million).

There was no other contingent liability that existed at 30 June 2019.

27. OPERATING LEASE COMMITMENTS

Operating leases relate to the lease of the Bank’s fallback site and other properties with lease terms between 1 to 5 years. The Bank does not have an option to purchase the leased properties at the end of the lease periods.

1 Year >1-5 years > 5 Years Total Rs Rs Rs Rs Archiving-Plaine Lauzun DBM 193,288 - - 193,288 Fallback Site-Cyber Tower 3,537,222 8,326,163 - 11,863,385 3,730,510 8,326,163 - 12,056,673

An amount of Rs4,596,458 (2018: Rs2,335,331) has been expensed in profit or loss for the year.

28. FINANCIAL INSTRUMENTS

(a) Introduction

A financial instrument is any contract that gives rise to both a financial asset of one enterprise and a financial liability or equity instrument of another enterprise.

As the monetary authority for Mauritius, the Bank’s activities are policy orientated. In the course of carrying out its functions, the Bank is faced with financial risks, operational risks and reputational risks. The main financial risks to which the Bank is exposed to are credit risk, interest rate risk, liquidity risk, price risk and foreign exchange risk. A significant proportion of these risks arise from the management of foreign exchange reserves of the Bank.

The foreign exchange risk or the capital loss as a consequence of fluctuations in the exchange rates is managed mainly through diversification of currency portfolios in which the Bank invests. In the management of foreign exchange reserves, minimising liquidity risk and maximising safety and preservation of capital are the prime considerations in order to achieve its prime objectives.

173 Notes to the Financial Statements for the Year Ended 30 June 2019 (continued)

Financial Statements 28. FINANCIAL INSTRUMENTS (CONT’D)

(b)(i) Categories of financial instruments

Carrying Amount Fair Value Carrying Amount Fair Value 2019 2019 2018 2018 Financial Assets Rs Rs Rs Rs Amortised Cost Cash and Cash Equivalents (excl. Foreign Investments at FVOCI) 53,015,860,003 53,015,860,003 28,275,415,664 28,275,415,664 Loans and Advances 4,159,502,327 4,159,502,327 4,288,454,235 4,288,454,235 Staff Loans 104,191,663 104,191,663 88,122,365 88,122,365 Investment in Government Securities 324,730,597 324,730,597 - - Other Financial Assets 43,078,136 43,078,136 61,050,280 61,050,280 57,647,362,726 57,647,362,726 32,713,042,544 32,713,042,544 Fair Value Through Other Comprehensive Income Foreign Investments 84,153,487,960 84,153,487,960 93,632,943,433 93,632,943,433 Fair Value Through Profit or Loss Foreign Investments 95,152,906,113 95,152,906,113 89,955,618,282 89,955,618,282 Gold Deposits 20,010,473,008 20,010,473,008 17,282,602,558 17,282,602,558 Other Investments 1,064,439,155 1,064,439,155 912,192,125 912,192,125 Investment in Government Securities - - 654,928,248 654,928,248 116,227,818,276 116,227,818,276 108,805,341,213 108,805,341,213 Total Financial Assets 258,028,668,962 258,028,668,962 235,151,327,190 235,151,327,190 Financial Liabilities Amortised Cost 231,518,462,422 231,518,462,422 218,322,479,588 218,322,479,588

(b)(ii) Fair value of financial instruments

The Bank measures fair values using the following fair value hierarchy that reflects the significance of the inputs used in making the measurements:

Level 1: Quoted (unadjusted) in an active market for an identical instrument.

Level 2: Valuation techniques based on observable inputs, either directly (i.e. as prices) or indirectly (i.e. derived from prices). This category includes instruments valued using: quoted market prices in active markets for similar instruments; quoted prices for identical or similar instruments in markets that are considered less than active; or other valuation techniques where all significant inputs are directly or indirectly observable from market data.

Level 3: Valuation techniques using significant unobservable inputs. This category includes all instruments where the valuation technique includes inputs not based on observable data and the unobservable inputs have a significant effect on the instrument’s valuation. This category includes instruments that are valued based on quoted prices for similar instruments where significant unobservable adjustments or assumptions are required to reflect differences between the instruments. Reasonable possible changes to one of the significant unobservable inputs at reporting date would have no material effect on the fair value of the equity securities.

174 Notes to the Financial Statements for the Year Ended 30 June 2019 (continued)

28. FINANCIAL INSTRUMENTS (CONT’D) Financial Statements

(b)(ii) Fair value of financial instruments (Cont’d)

The table below analyses financial instruments measured at fair value at the end of the reporting period, by the level in the fair value hierarchy into which the fair value measurement is categorised:

Fair Value of Financial Instruments

Total carrying 2019 Level 1 Level 2 Level 3 amount Total fair value Financial Assets Rs Rs Rs Rs Rs Gold Deposits 20,010,473,008 - - 20,010,473,008 20,010,473,008 Foreign Investments 84,153,487,960 95,152,906,113 - 179,306,394,073 179,306,394,073 Other Investments - - 1,064,439,155 1,064,439,155 1,064,439,155 104,163,960,968 95,152,906,113 1,064,439,155 200,381,306,236 200,381,306,236 2018 Gold Deposits 17,282,602,558 - - 17,282,602,558 17,282,602,558 Foreign Investments 93,632,943,433 89,955,618,282 - 183,588,561,715 183,588,561,715 Other Investments - - 912,192,125 912,192,125 912,192,125 Investment in Government Securities - 654,928,248 - 654,928,248 654,928,248 110,915,545,991 90,610,546,530 912,192,125 202,438,284,646 202,438,284,646

A reconciliation of fair value measurements in level 3 is set out below:

Equity Securities 2019 2018 Rs Rs Opening balance 912,192,125 476,991,146 Addition during the year 16,669,740 358,210,769 Change in fair value 135,577,290 76,990,210 Closing balance 1,064,439,155 912,192,125

Reasonable possible changes to one of the significant unobservable inputs at reporting date would have no material effect on the fair value of the equity securities.

Valuation techniques used

The fair values of financial assets and financial liabilities that are traded in active markets are based on quoted market prices or dealer price quotations. For those investments where there is no active market, these are stated at cost less impairment. However, for the other financial instruments, the Bank determines fair values using the valuation technique as per table below:

Valuation Sensitivity analysis Description technique 2019 2018 Rs Rs Other Net asset value of 10% Increase/ investments the investee company Decrease 106,443,916 91,219,212

175 Notes to the Financial Statements for the Year Ended 30 June 2019 (continued)

Financial Statements 28. FINANCIAL INSTRUMENTS (CONT’D)

(b)(iii) Financial Asset and Financial Liability Classification

The Bank’s accounting policies provide scope for financial assets and financial liabilities to be designated on inception into different accounting categories in certain circumstances as described in note 3 (a) (ii).

(c) Credit Risk

Disclosure of credit risk enables the users of financial statements to assess the extent to which failures by counterparties to discharge their obligations could adversely impact on the Bank’s future cash inflows from financial assets held at the reporting date.

The Bank is exposed to credit risk which is the risk of loss arising from the failure of a borrower, issuer, counterparty or customer to meet its financial obligations to the Bank. Credit risk on the securities held by the Bank is managed by holding only high quality marketable securities issued chiefly by entities enjoying a good credit rating. Credit risk also arises as a result of investment of foreign exchange reserves with foreign counterparties. Investment in Government securities is considered as risk free. Credit risk also arises when the Bank provides liquidity to financial institutions through open market operations as part of monetary policy implementation.

(i) Concentration of Credit Exposure by Geographical Area

The Bank’s significant end-of-year concentration of credit exposure by geographical area was as follows:

2019 2018 Rs Rs Mauritius 4,639,485,346 5,093,599,575 USA 78,827,166,799 68,228,014,267 United Kingdom 109,063,973,643 82,712,458,477 Europe 48,494,799,583 58,264,411,363 Others 17,003,243,591 20,852,843,508 258,028,668,962 235,151,327,190

(ii) Concentration of Credit Exposure by Counterparty Types

The Bank’s significant end-of-year concentration of credit exposure by counterparty types was as follows:

2019 2018 Rs Rs Government 31,598,386,889 8,346,717,533 Supranational Financial Institutions 169,284,601,154 149,273,943,724 Foreign Banks and Financial Institutions 38,945,214,050 49,568,707,788 Other 18,200,466,869 27,961,958,145 258,028,668,962 235,151,327,190

176 Notes to the Financial Statements for the Year Ended 30 June 2019 (continued)

28. FINANCIAL INSTRUMENTS (CONT’D) Financial Statements

(c) Credit Risk (Cont’d)

(iii) Credit Exposure by Credit Rating

The following table presents the credit ratings of respective financial assets based on the ratings of Moody’s. The Bank’s investment in equity shares which typically do not obtain ratings and in Gold are denoted as Others. The Bank’s investments with foreign central banks are presented separately.

Credit Rating 2019 2018 Rs % Rs % Cash and Cash Equivalents Central Banks 50,254,719,097 19.83 27,570,217,158 11.98 Aaa - - 13,615,454,933 5.92 Others 2,761,140,906 1.09 2,225,053,516 0.97 Gold Deposits Others 20,010,473,008 7.90 17,282,602,558 7.51

Foreign Financial assets held at Fair Value Through Other Comprehensive income Aaa 19,025,767,848 7.51 5,743,319,837 2.50 Aa 3,920,336,022 1.55 3,537,169,552 1.54 A 17,140,713,847 6.76 24,432,772,602 10.62 Baa 18,771,399,606 7.41 27,646,005,627 12.02 Ba 560,030,301 0.22 - - Others 24,735,240,336 9.76 17,138,365,874 7.45 Foreign Financial Assets held at Fair Value Central Banks Through Profit or Loss 15,067,046,759 5.95 14,522,719,245 6.30 Others 81,150,298,509 32.02 76,345,091,160 33.19 Total External Assets 253,397,166,239 100.00 230,058,772,062 100.00

Credit Rating 2019 2018 Rs % Rs % Loans and Advances Baa 253,144,349 5.47 478,025,980 9.39 Others 4,010,549,641 86.59 3,880,692,680 76.20 Government Securities Others 324,730,597 7.01 654,928,248 12.86 Other Assets Others 43,078,136 0.93 78,908,220 1.55 Total Domestic Financial Assets 4,631,502,723 100.00 5,092,555,128 100.00

177 Notes to the Financial Statements for the Year Ended 30 June 2019 (continued)

Financial Statements 28. FINANCIAL INSTRUMENTS (CONT’D)

(c) Credit Risk (Cont’d)

(iii) Credit Exposure by Credit Rating (Cont’d)

Summary by Major Credit Category Credit Rating 2019 2018 Rs % Rs % External Assets Central banks 65,321,765,856 25.78 42,092,936,404 18.30 Aaa 19,025,767,848 7.51 19,358,774,769 8.41 Aa 3,920,336,022 1.55 3,537,169,552 1.54 A 17,140,713,847 6.76 24,432,772,602 10.62 Baa 18,771,399,606 7.41 27,646,005,627 12.02 Ba 560,030,301 0.22 - - Others 128,657,152,759 50.77 112,991,113,108 49.11 253,397,166,239 100.00 230,058,772,062 100.00

Domestic Financial Assets Baa 253,144,349 9.49 478,025,980 9.39 Others 4,378,358,374 90.51 4,614,529,148 90.61 Total Domestic Financial Assets 4,631,502,723 100.00 5,092,555,128 100.00 Total Financial Assets 258,028,668,962 235,151,327,190

(iv) Credit Exposure by Credit Quality

2019 2018 Purchased Debt Investment Loss Stage 1 Stage 2 Stage 3 or Originated Securities at Allowance 12-month Life Time Life Time Credit FVTOCI Rate ECL ECL ECL Impaired Total Total Rs Rs Rs Rs Rs Rs

Credit rating AAA to 0.010%- Baa: Low to fair risk 0.175% 83,593,457,659 - - - 83,593,457,659 78,497,633,490 Credit rating Ba: Monitoring 0.939% - 560,030,301 - - 560,030,301 - Credit rating below Ba: Default 100% ------Total Carrying Amount 83,593,457,659 560,030,301 - - 84,153,487,960 78,497,633,490 Loss Allowance (30,649,977) (2,995,812) - - (33,645,789) -

(d) Liquidity Risk

Liquidity risk is the difficulty that an entity will encounter in raising funds at short notice to meet financial commitments as and when they arise. Liquidity risk is also the risk arising from the possibility of an entity not realising the fair value of a financial asset that it may have to dispose of to meet a financial obligation. In order to reduce the level of liquidity risk arising out of open market operations, the Bank requires highly liquid marketable securities such as Government of Mauritius Treasury Bills as collateral for loans after applying a haircut.

The Bank manages liquidity of its foreign currency assets in order to settle commitments of the Bank and Government as and when they arise, as well as to intervene on the domestic foreign exchange market. The Bank has set limits with regard to currency and counterparty exposures to contain the risk.

178 Notes to the Financial Statements for the Year Ended 30 June 2019 (continued) Financial Statements Rs Total 147,269,799 324,730,597 4,159,502,327 5,751,554,294 73,856,911,276 36,415,731,382 26,510,206,540 115,494,265,470 231,518,462,422 253,397,166,239 258,028,668,962 - - - - - Rs Above Above 56,572,014 5 years 481,424,644 481,424,644 13,746,181,194 13,689,609,180 13,264,756,550 - - - Rs 47,619,649 5 years 324,730,597 3,894,744,675 Between 1 and Between 99,105,268,097 36,932,164,489 36,932,164,489 131,770,337,665 136,037,432,586 - - - - - Rs 13,789,011 Above 6 and Above 8,679,517,470 8,693,306,481 12 months 12 up to 30,072,550,633 30,072,550,633 (21,379,244,152) - - - - - Rs 72,847,911 Above 3 and Above up to 6 months up to (4,464,734,283) 15,068,581,886 15,068,581,886 10,603,847,603 10,530,999,692 - Rs Up to Up to 43,078,136 178,120,730 3 months 5,751,554,294 73,856,911,276 36,415,731,382 88,947,901,098 32,939,543,818 88,726,702,232 (60,015,839,672) 148,963,740,770 (i) Demand deposits include deposits in respect of regulatory requirements. of regulatory (i) Demand deposits include in respect known. is not relinquished on which the liabilities will be exact date to 3 months as the is classified under liabilities up in circulation (ii) Currency Maturity Analysis At 30 June 2019 Non Derivative Financial Assets Non Derivative Assets Foreign Loans and Advances Government Securities Government Other Assets Non Derivative Financial Liabilities Non Derivative in Circulation Currency Total Financial Assets Total Demand Deposits Monetary Instruments Policy Other Liabilities Total Financial Liabilities Total Net LiquidityNet Gap FINANCIAL INSTRUMENTS (CONT’D) Liquidity (Cont’d) Risk reporting the to the at period remaining the on based maturity groupings relevant into liabilities and assets financial Bank’s the show below tables The on or payable receivable of interest inclusive cash flows, undiscounted the contractual maturity are The amounts disclosed in the tables contractual date. financial instruments. bearing non-derivative interest Note: 28. (d) 179 Notes to the Financial Statements for the Year Ended 30 June 2019 (continued) Financial Statements Rs Total 149,172,645 654,928,248 5,147,001,802 4,288,454,235 92,110,620,664 16,828,847,602 34,077,888,842 86,986,968,280 235,151,327,190 218,322,479,588 230,058,772,062 - - - - Rs 5,966,500 57,297,436 Above Above 5 years 479,504,977 479,504,977 36,162,214,573 36,098,950,637 35,682,709,596 - - - Rs 30,434,554 5 years 329,812,872 4,039,563,487 82,519,434,615 30,928,973,353 30,928,973,353 Between 1 and Between 113,448,407,968 109,048,597,055 - - - - - Rs 152,364,911 8,198,969,130 8,351,334,041 Above 6 and Above 30,813,052,109 30,813,052,109 (22,461,718,068) 12 months 12 up to - - - - Rs 72,701,398 325,115,376 1,582,587,283 9,633,853,795 9,633,853,795 Above 3 and Above 11,216,441,078 10,818,624,304 up to 6 months up to - Rs Up to Up to 17,857,939 61,440,655 3 months 5,147,001,802 34,077,888,842 65,972,929,530 65,893,630,936 86,986,968,280 20,255,236,430 (80,494,165,824) 146,467,095,354 Liquidity (Cont’d) Risk Maturity Analysis (Cont’d) At 30 June 2018 At Non Derivative Financial Assets Non Derivative Assets Foreign Loans and Advances Government Securities Government Other Assets Total Financial Assets Total Non Derivative Financial Liabilities Non Derivative in circulation Currency Demand Deposits Monetary Instruments Policy Other Liabilities Total Financial Liabilities Total Net LiquidityNet Gap FINANCIAL INSTRUMENTS (CONT’D) (d) The Bank did not have any derivative financial assets and liabilities at 30 June 2019 (2018: Nil). (2018: and liabilities at 30 June 2019 financial assets derivative any have The Bank did not 28. 180 Notes to the Financial Statements for the Year Ended 30 June 2019 (continued)

28. FINANCIAL INSTRUMENTS (CONT’D) Financial Statements

(e) Interest Rate Risk

Repricing Analysis

Changes in market interest rates have a direct effect on the contractually determined cash flows associated with specific financial assets and financial liabilities, whose interest rates are periodically reset to market, as well as the fair values of other instruments on which the interest rates are fixed throughout the period of the contract. The policy pertaining to changes in fair values due to changes on exchange rates is explained at section (f) below.

The rates on financial assets and financial liabilities which are interest-bearing are set at or around current market levels.

The Bank’s reserves management includes investments in a variety of foreign currency denominated cash, deposits and other securities. The Bank’s objective is to maximise return within the constraints of liquidity and safety and these are effected through investments with sound financial institutions.

The following table demonstrates the sensitivity of the Bank’s profit to interest rate changes, all other variables held constant.

Change in yield Effect on Profit Effect on Profit (basis points) and Equity 2019 and Equity 2018 Rs Rs Foreign Currency Portfolio + 50 1,055,343,184 995,177,281 - 50 (1,055,343,184) (995,177,281)

Government Securities + 50 1,556,000 3,106,000 - 50 (1,556,000) (3,106,000)

Government securities are amortised in the Statement of Financial Position of the Bank.

The tables below summarise the Bank’s exposure to interest rate risk. The amounts disclosed in the tables are the contractual undiscounted cash flows, net of interest receivable or payable on interest bearing non-derivative financial instruments.

181 Notes to the Financial Statements for the Year Ended 30 June 2019 (continued) Financial Statements Rs Total 147,269,799 324,730,597 4,159,502,327 5,751,554,294 73,856,911,276 36,415,731,382 26,510,206,540 115,494,265,470 231,518,462,422 253,397,166,239 258,028,668,962 - - Rs 18,984,317 43,078,136 bearing Non-interest Non-interest 6,110,008,612 6,047,946,159 2,263,529,257 52,941,490,174 36,415,731,382 91,620,750,813 (85,510,742,201) - - - Rs 104,191,663 324,730,597 3,894,744,673 37,413,589,134 37,413,589,134 Over 12 months 12 Over 148,719,174,625 111,305,585,491 144,395,507,692 - - - - - Rs 7,817,798 12 months 12 4,608,700,401 4,600,882,603 17,800,872,132 17,800,872,132 (13,192,171,731) Above 9 and up to 9 and up to Above - - - - - Rs 5,971,213 to 9 months 4,078,634,867 4,084,606,080 (8,187,072,420) 12,271,678,500 12,271,678,500 Above 6 and up Above - - - - - Rs 72,847,911 6 months (4,464,734,283) 15,068,581,886 15,068,581,886 10,603,847,603 10,530,999,692 Above 3 and up to 3 and up to Above - - - Rs 159,136,415 3,488,025,037 20,915,421,102 Up to 3 months Up to 83,743,195,226 83,902,331,641 26,559,341,684 32,939,543,818 57,342,989,957 Interest Sensitivity Interest Gap Total Financial Total Liabilities Other Liabilities Monetary Policy Instruments Demand Deposits Financial Liabilities in Currency Circulation Total Financial Total Assets Other Assets Other Assets Government Government Securities Loans and Advances Financial Assets Financial Assets Assets Foreign At 30 June 2019 At 30 June 2019 Repricing Analysis FINANCIAL INSTRUMENTS (CONT’D) (Cont’d) Risk Rate Interest (Cont’d) Analysis Repricing 28. (e) 182 Notes to the Financial Statements for the Year Ended 30 June 2019 (continued) Financial Statements Rs Total 149,172,645 654,928,248 5,147,001,802 4,288,454,235 16,628,847,602 86,986,968,280 235,151,327,190 34,077,888,842 34,077,888,842 92,110,620,664 218,322,479,588 230,058,772,062 907,400 Rs 15,651,676 17,857,939 61,440,655 bearing 4,510,010,370 Non-interest Non-interest 1,703,021,763 4,604,960,640 95,161,973,239 59,380,155,234 59,380,155,234 (90,557,012,599) 34,077,888,842 34,077,888,842 - - Rs 87,731,990 329,812,872 4,045,529,987 Over 12 months 12 Over 31,408,478,330 31,408,478,330 148,698,430,416 117,289,952,086 144,235,355,567 - - - - Rs 152,364,911 4,316,122,068 4,468,486,979 12 months to 12 17,544,913,507 17,544,913,507 Above 9 and up Above (13,076,426,528) - - - - - Rs to 9 months 3,842,595,250 3,842,595,250 (9,425,543,352) 13,268,138,602 13,268,138,602 Above 6 and up Above - - - Rs 72,701,398 309,463,700 1,513,822,925 to 6 months 9,633,853,795 9,633,853,795 11,147,676,720 10,765,511,622 Above 3 and up Above - - - Rs 51,305,122,115 3,443,980,039 62,389,177,185 62,389,177,185 11,084,055,070 27,606,813,046 Up to 3 months Up to 20,254,329,030 Government Securities Government Other Assets At 30 June 2018 Financial Assets Assets Foreign Loans and Advances Monetary Policy Instruments Other Liabilities Financial Liabilities Total SensitivityInterest Gap Total Financial Assets Total Financial Liabilities in circulation Currency Demand Deposits Repricing Analysis FINANCIAL INSTRUMENTS (CONT’D) (Cont’d) Risk Rate Interest (Cont’d) Analysis Repricing 28. (e) 183 Notes to the Financial Statements for the Year Ended 30 June 2019 (continued)

Financial Statements 28. FINANCIAL INSTRUMENTS (CONT’D)

(e) Interest Rate Risk (Cont’d)

Effective Interest Rates

For assets: The interest-bearing Mauritian rupee denominated assets earn interest at rates ranging from 2.50% p.a. to 8.75% p.a. (2018: 2.50% p.a. to 8.75% p.a.) and from -0.55% p.a. to 7.84% p.a. (2018: -0.55% p.a. to 8.27% p.a.) for foreign currency denominated assets.

For liabilities: The interest-bearing Mauritian rupee denominated liabilities bear interest at rates ranging from 2.14% p.a. to 6.95% p.a. (2018: 1.65% p.a. to 6.95% p.a.) and from -0.40% p.a. to 3.10% p.a. (2018: -0.40% p.a. to 2.12% p.a.) for liabilities denominated in foreign currencies.

(f) Foreign Currency Risk

The Bank of Mauritius has monetary assets and liabilities denominated in foreign currencies, which consist mainly of currencies of the major trading partners of Mauritius. The liabilities represent mainly deposit accounts maintained by its customers.

The Bank does not hedge against risk of fluctuations in exchange rates. However, it has set aside a reserve called Special Reserve Fund, which is used to cater for movements due to appreciation/depreciation in foreign currencies, Gold and SDR.

The Bank considers it has a diversified portfolio of foreign currencies which would mitigate any foreign currency risk that may arise from volatility in exchange rates. The composition of the Bank’s Foreign Assets based on the SDR Basket is as follows:

2019 2018 Rs Rs SDR Basket 221,356,456,325 201,442,053,725 Non SDR Basket 32,040,709,914 28,616,718,337 253,397,166,239 230,058,772,062

The SDR Basket comprises the following currencies: JPY, EUR, GBP, RMB and USD.

The following table demonstrates the sensitivity of the Bank’s equity to exchange rate changes, all other variables held constant.

Change in MUR Effect on Profit and Effect on Profit and Exchange Rate Equity 2019 Equity 2018 Rs Rs +50 cents 6,044,490,172 5,702,972,886 Foreign Currency Portfolio -50 cents (6,044,490,172) (5,702,972,886)

29. CAPITAL RISK MANAGEMENT

Under section 10 of the Bank of Mauritius Act 2004, the Stated and Paid Up Capital of the Bank shall be not less than one billion rupees and shall be subscribed and held solely by the Government. Further, the amount paid as capital of the Bank may be increased from time to time by transfer from the General Reserve Fund or the Special Reserve Fund of such amounts as the Board may, with the approval of the Minister, resolve. The paid up capital presently stands at Rs2 billion after a transfer of Rs1 billion from the Special Reserve Fund on 7 November 2011.

184 Notes to the Financial Statements for the Year Ended 30 June 2019 (continued)

30. RELATED PARTY TRANSACTIONS Financial Statements

The balances and transactions with Government of Mauritius are disclosed in Notes 9, 18, 20 and 24 to the financial statements.

Emoluments payable to Directors are disclosed in Note 22 as per their terms of appointment.

The Bank contributes for the post-retirement benefits of its employees as disclosed in Note 16(c), including for the Governor and the Second Deputy Governor. The contribution for the Governor was Rs1,562,904 (2018: Rs1,279,747) and Second Deputy Governor was Rs934,189 (2018: Rs933,231).

31. TRANSACTIONS WITH THE INTERNATIONAL MONETARY FUND (“IMF”)

As a member of IMF, Mauritius was initially allocated an amount of SDR15,744,000. In August 2009, the IMF Board of Governors approved an additional allocation of Special Drawing Rights to member countries. Accordingly, a total amount of SDR81,061,549 (Rs3,987,287,211) was allocated to Mauritius, bringing the total allocations to SDR96,805,549. IMF charges the Bank on the SDR allocations and also remunerates it on the SDR holdings on a quarterly basis. IMF charges for the current year amounted to Rs41,546,661 (2018: Rs28,673,878).

The Bank maintains two current accounts and one securities account for the IMF. The IMF No 1 and No 2 current accounts appear in the Statement of Financial Position under the heading “Demand Deposits from Other Financial Institutions”. The securities account is not included in the Statement of Financial Position and is kept separately.

The Government of Mauritius has been participating in the IMF Quarterly Financial Transactions Plan. Participation in the plan entails the obligation to provide usable currencies in exchange for SDRs when designated, and accords the right to use SDRs in case of a balance of payment need.

32. SUBSEQUENT EVENTS

There were no material subsequent events after the reporting date.

33. TAXATION

The Bank is exempted from any tax imposed on income, profits or capital gains under section 64 of the Bank of Mauritius Act 2004.

185

Financial Statements 8 Appendices The organisation structure of the Bank structure The organisation Officials Senior Management and Deputy First Governor Governor, by attended meetings Overseas Second Deputy Governor and workshops seminars courses, training meetings, Overseas and workshops seminars Local courses, institutions,List money-changers of banks, non-bank deposit-taking the Bank of Mauritius as at licensed by dealers exchange and foreign 30 June 2019 Appendix I Appendix Appendices Appendix II Appendix III Appendix IV Appendix V Appendix VI

Appendices 188 Appendix I

Bank of Mauritius - Organisation Chart

BOARD OF DIRECTORS

Audit & Risk Committee

Secretary to GOVERNOR the Board Head

Governor’s Office

International Relations & Security Communications

First Deputy Governor Second Deputy Governor

FDG’s Office SDG’s Office

Director Economic Analysis Director Financial Markets & Research and Statistics and Reserve Management Director Director Director Supervision Secretary

Assistant Assistant Assistant Assistant Assistant Assistant Assistant Assistant Assistant Assistant Assistant Assistant Assistant Assistant Head Head Director Director Director Director Director Director Director Director Director Director Director Director Director Director

MICROPRUDENTIAL SUPERVISION ECONOMIC PAYMENTS RISK FINANCIAL BANKING SYSTEMIC & BANKING SPECIALISED ACCOUNTING INTERNAL ANALYSIS RESERVE INFORMATION SYSTEM FINANCIAL & LEGAL CORPORATE STATISTICS MARKETS & UNIT 1 UNIT 2 UNIT 3 AML/CFT STRATEGIC CONDUCT DIVISIONS & AUDIT & MANAGEMENT TECHNOLOGY & STABILITY PRODUCT SERVICES SERVICES OPERATIONS CURRENCY OVERSIGHT OVERSIGHT & POLICY BUDGETING RESEARCH MCIB CONTROL

Enforcement Health Library & Rodrigues Payment Human Facilities Museum & & Procurement Financial Office Oversight Resources Management Sanction Safety Literacy Secretary Economics Economics, MSc Finance, Mrs Marjorie Management Sewraj-Gopal BSc Accounting System & MCIB System Acting Director - Director Acting Financial Markets Financial Markets MA Public Economics, MA Public Economics, BA (Hons) Economics, Mrs Hemlata Sadhna Doctor of Philosophy in of Philosophy Doctor First Deputy Governor MA Industrial Economics M. A. Pampusa Heerah Mr Anil Kumar Tohooloo Tohooloo Mr Anil Kumar Operations and ReserveOperations MA Economics, BSc (Hons) ACA (CharteredACA Accountant) Currency, IT and Payments IT and Payments Currency, Acting Director - Banking & Director Acting Dr Renganaden Padayachy Dr Renganaden Padayachy AIA Statistics Governor Governor Statistics Bissessur FCCA, F Mr Mahendra Mr Mahendra Economiques, MSc Economics Second Deputy Product Control Control Product FCCA, Finance MSc Stability and Risk & Maîtrise en Sciences Mr Jaywant Pandoo Mr Jaywant Vikramdass Punchoo Mr Jitendra Nathsingh Mr Jitendra BA (Hons) Mathematical MSc Applied Economics, Analysis & Research and Analysis & Research Acting Director - Financial Director Acting Mr Yandraduth Googoolye Googoolye Mr Yandraduth Acting Director - Economic Director Acting Senior Management Officials Management Senior Appendix II Appendix

Appendices 190 Appendices 191 Thakoor Thakoor Economics Mrs Urvashi Supervision Automatique Supervision Khodabocus BSc Mathematics Assistant Director - Assistant Director Assistant Director - Assistant Director Assistant Director - Assistant Director Mr Youssouf Waesh Waesh Mr Youssouf FCCA, MSc Financial Mr Dhanesswurnath Mr Dhanesswurnath BA (Hons) Economics Chuttarsing-Soobarah MBA Finance, Ingénieur Mr Ramsamy Chinniah Mr Ramsamy Head - Governor`s Office Head - Governor`s en Informatique - - Mesures MSc Financial Mathematics, Payments System & MCIB System Payments Supervision Li Yun Fong Li Yun MBA Finance, ACMA CGMA,ACMA and Social Studies Institute of Bankers Institute Assistant Director - Assistant Director Assistant Director - Assistant Director FCCA, Finance MSc Corporate ServicesCorporate BA (Hons) Economics Head - Internal Audit Head - Internal Mr Ng Cheong Jose MSc Actuarial Science Mrs Sudha Hurrymun Assistant Director - IT Assistant Director BSc Computer Science BSc Computer Ms Smeeta Bissoonauth Associateship of CharteredAssociateship Mr Yuntat Chu Fung Leung Chu Fung Mr Yuntat

th Annual Official Reserves Annual Official th Meeting of the OECD Forum on Forum of the OECD Meeting th Annual General Meeting of the Bank for of the Bank for Meeting Annual General Belt and Road Forum for International International for Forum Belt and Road th nd Cooperation organised by the People’s Republic of Republic People’s the by organised Cooperation China; in Beijing, April 2019 27 25 to China, from Nam Chan Ms Elisa Hay by accompanied He was Officer-International Communications Yiet Po, and Communications; and Relations the 89 International Settlements from 28 to 30 June 2019 in 30 June 2019 28 to from Settlements International of the with the Meeting together Basel, Switzerland, Institute & Financial Management Macroeconomic Africa (MEFMI) Regional and Southern of Eastern the 12 by followed Forum, Bank Governors Central Management Seminar organised by JP Morgan JP Morgan by Management Seminar organised USA. York, in New 2019 03 May 29 April to from Harmful Tax Practices from 15 to 19 October 2018 2018 October 19 to 15 from Practices Tax Harmful France; in Paris, 06 03 to from Week the Global Payments attended Malaysia; Lumpur, in Kuala December 2018 High and African Leaders the European attended in December 2018 18 to 17 from Forum Level Vienna, Austria; of the with representatives a meeting attended 06 to 04 taxation from Union regarding European Belgium; in Brussels, 2019 March on at the CCBG Meeting the Governor represented South Africa; in Pretoria, 05 April 2019 NeetyanandMr Kowlessur, by accompanied was He Office; and then Chief-Governor’s the 45 attended Andrew Crockett Governors’ Roundtable for African for Roundtable Governors’ Crockett Andrew in Oxford, 03 July 2019 to 01 from Bankers Central UK; Koraïsha Miss Bibi by accompanied He was Control. and Product Chief-Risk Jeewoot, Banknote the Oberthurattended Fiduciaire in Paris, July 2018 27 23 to Seminar from Managers’ Netherlands; and Amsterdam, France des Centrales des Banques the Sommet attended la Cybersécurité Système le et Francophones: Pays in Ottawa, 2018 September 12 to 11 Financier from Canada; the 50 attended several ancillary the of in the margins meetings several Spring Meetings; Marie-Agnes Marjorie Mrs by accompanied He was Director-Financial then Assistant Heerah-Pampusa, and Reserve Management;Markets the 2

x. iv. v. vi. vii. viii. The First Deputy Governor, Dr Renganaden The First Deputy Governor, Padayachy: i. ii. iii. ix. International Islamic Liquidity Management International Meeting of the SADC Committee of Central of Central Committee of the SADC Meeting Annual Meeting of the Assembly of Governors of Governors of the Assembly Annual Meeting st th st the 41 Bank Governors on 07 September 2018 in Maseru, in Maseru, 2018 September 07 on Bank Governors Lesotho; NeetyanandMr Kowlessur, by accompanied was He Tayushma Office, and Ms then Chief-Governor’s & 1-Economic Analysis Bank Officer Grade Sewak, Research; and 02 October on 01 Rue with De La a meeting Kingdom; in London, United 2018 Tohooloo, Mr Anil Kumar by accompanied He was and Currency then Assistant Director-Banking Division. Exchange Financial International Road’ and ‘Belt the October 31 to 24 Seminar from and Cooperation and Shanghai, China; in Beijing 2018 the 21 of the Association of African Central Banks on 09 of African Central of the Association El-Sheikh, Egypt; Sharm in 2018 August Pitteea, Mr Karankumar by accompanied He was & Research, Analysis Senior Analyst-Economic Bank Officer Grade and Mr Arjun Munbodh, 1-Supervision; the 47 Corporation Governing Board Meeting on 05 Meeting Board Governing Corporation in Jeddah, Saudi Arabia; December 2018 of the Memorandum for a signing ceremony the Bank of Mauritius between Understanding Regulatory Insurance and Banking China the and and information Commission on cooperation of banking supervision,sharing in the area and with the Bank of China on 22 and 23 a meeting China; in Beijing, January 2019 Mr Dhanesswurnath by accompanied He was and System Assistant Director-Payments Thakoor, Chief-Legal Jutton-Gopy, Rajshri Devi MCIB, Mrs Services Nam Chan Yiet Po, and Ms Elisa Hay and Relations Communications Officer-International Communications; hosted Summit Blockchain Global ADC 2019 the The Honourable of South Australia, the Premier by in 2019 20 March to 18 from Marshall, Steven South Australia; Adelaide, from Bank Spring Meetings IMF/World the 2019 DC, USA, and in Washington April 2019 14 to 10

The Governor, Mr Yandraduth Googoolye, attended: attended: Googoolye, Mr Yandraduth The Governor, i. Appendix III Appendix Governor, by attended Overseas Meetings First Deputy Second Deputy and Governor Governor iii. iv. v. ii. vi. vii. viii.

Appendices 192 Appendices 193 Anniversary Conférence Conférence th ème A Cross-Sectoral A Cross-Sectoral Annual International Conference Conference Annual International th attended the Mobile World Conference hosted by by hosted Conference the Mobile World attended 28 February 25 to Co Ltd from Technologies Huawei Spain; in Barcelona, 2019 Mooneesing Janna Mr by accompanied He was Management in Technology; to Advisor Naikeny, at the FSI 20 the Governor represented Conference sponsored by BIS: by sponsored Conference Reflection on the Past and Looking Ahead to PastAhead and Looking on the Reflection in Basel, 2019 March 13 to 12 from Future the Switzerland; at the 25 the Governor represented on Policy Challenges for the Financial Sector from from the Financial Sector Challenges for on Policy DC, USA. in Washington June 2019 07 05 to des Gouverneurs des Banques Centrales des Pays des Pays Centrales des Banques des Gouverneurs in Bordeaux, 2019 25 May 23 to from Francophones and France; the19 attended

v. vi. vii. viii. International Conference Conference International th Meeting of the FSB Regional Regional of the FSB Meeting th attended the Workshop on FinTech, Payments Payments FinTech, on the Workshop attended in July 2018 10 to 09 Inclusion from and Financial Botswana; Gaborone, Bank Workshop Central the Euroclear attended 16 to 14 from Conference Collateral and Euroclear Belgium; in Brussels, 2018 November of groups the regional of the Meetings attended banking supervisors,20 Consultative Group for Sub-Saharan Africa on 11 Africa on 11 Sub-Saharan for Group Consultative South Africa; in Johannesburg, December 2018 Rughoobur, Mr Dhirajsingh by accompanied He was Senior Analyst-Supervision; of Banking Supervisors and Group of International of International of Banking Supervisors and Group Supervisors PlenaryFinance Centre from Meeting Arab United in Abu Dhabi, 2018 November 27 26 to Emirates; the 14 attended ii. iii. The Second Deputy Governor, Mr Mahendra Mr Mahendra DeputyThe Second Governor, Punchoo: Vikramdass i. iv. Conférence des Responsables des Responsables Conférence AML/CFT Public Private Sector Sector AML/CFT Public Private th ème 11 the ESAAMLG Task Force of Senior Officials Force Task ESAAMLG BCBS-FSI High Level Meeting for Africa on for Meeting BCBS-FSI High Level th th Dialogue Meeting hosted by ESAAMLG, from 02 from ESAAMLG, by hosted Dialogue Meeting Seychelles; 2018, 08 September to 14 Supervisory Supervisors College for ABSA of outside banking operations Limited’s Group Authority Prudential of South by Africa hosted September 07 05 to African Reserve from Bank, Africa; South Pretoria, 2018, hosted Workshop Recommendation Remittance Financial Stability and Standard by Board London, UK; 2019, March Bank, on 11 Chartered Finance Centre of International Group SupervisorsGIFCS, Plenary by hosted Meeting London, UK; and 25 April 2019, to 24 from (AGL) Limited Group Visit ABSA the at On-site SupervisoryAfrica and pertainingCollege to by Plc hosted Barclays from separation AGL’s AuthorityPrudential Reserve of South African Johannesburg 2019, May 10 09 to Bank, from South Africa. and Pretoria, 36 Strengthening Financial Sector Supervision Financial Sector and Strengthening Financial by Regulatory Priorities hosted Current Stability on Basel Committee and the Institute January 01 to Banking Supervision, 31 from Africa; and South Cape Town, February 2019, Conference Biennial Research IADI 2019 Financial Resilient more a Building “Towards and in Deposit Insurance System-Challenges International by hosted Bank Resolution” 24 23 to from Association of Deposit Insurers, Basel, Switzerland. 2019, May Meeting and 4 Meeting Mr Anil Kumar Tohooloo, Acting Director- Acting Tohooloo, Kumar Mr Anil Technology Information & Currency, Banking & MCIB accompanied the System and Payments 2018, October and 02 01 on De La Rue to Governor Kingdom. London, United Chinniah, Assistant Director- Mr Ramsamy Supervision, of the the Meeting attended Supervisory Bank of India hosted State for College January 2019, Reserve on 14 Bank of India, by Mumbai, India. Audit, Leung, Head-Internal Chu Fung Mr Yuntat attended MrsUrvashi Chuttarsing-Soobarah, Assistant Director-Supervision, attended Mrs Sudha Hurrymun, Assistant Director- Supervision, attended d’Audit Interne des Banques Centrales des Pays des Pays Centrales des Banques Interne d’Audit from Swiss National Bank, by hosted Francophones Zurich, Switzerland. 2018, 05 October to 04 ii. i. ii. iii. iv. i. iii. • • • • • General Assembly, Assembly, General th Ordinary Meeting of Governors of Governors Ordinary Meeting Islamic Financial Stability Islamic Financial Forum, th th 19 Executive Forum for Policy-Makers Policy-Makers for Forum Executive the th Board Audit Committee Meeting hosted hosted Meeting Committee Audit Board Board Audit Committee Meeting hosted hosted Meeting Committee Audit Board rd nd Governing Board Meeting of the IILM and 10th the IILM and 10th of Meeting Board Governing IFSB Council Meeting, 17 IFSB Council Meeting, by International Islamic Liquidity Management International by Kuala 05 April 2019, to 04 from Corporation, Malaysia. Lumpur, attended the Peer to Peer Learning Programme Programme Learning Peer to the Peer attended with the South in collaboration Afritac by hosted to 29 October from Bank of Seychelles, Central and Seychelles; 2018, 09 November IMF/ 2019 the to the Governor accompanied and several Bank Spring Meetings World ancillary of the Spring in the margins meetings and attended April 2019 14 to 10 from Meetings the 17 and Senior Officials hosted by the IMF and and Senior Officials hosted 2019, April 16 to 15 from Treasury, Bank World DC, USA. Washington, 22 23 by International Islamic Liquidity Management International by 2018 September 07 03 to from Corporation, Lumpur, Kuala 2018, October 31 29 to and from and Malaysia; th nd Mrs Hemlata Sadhna Sewraj-Gopal, Secretary, Secretary, Mrs Hemlata Sewraj-Gopal, Sadhna the 19 attended 34 of the AACB, preceded by Technical Committee Committee Technical by preceded of the AACB, 11 from des Comores, Centrale Banque by hosted Comoros. Moroni, June 2019, 13 to MrsMarjorie Marie-Agnes Pampusa, Heerah Operations Markets Director-Financial Acting and Reserve Management, 22 General Assembly Meeting hosted by International International by hosted Assembly Meeting General Islamic Liquidity Financial Management & Islamic 2019, May 01 28 April to Stability from Board, Malaysia, visit at Bank Negara one-day by preceded Malaysia. Lumpur, Kuala on 26 April 2019, Director- Acting Nathsingh Bissessur, Mr Jitendra and Statistics,Economic Analysis & Research attended Mr Jaywant Pandoo, Acting Director-Financial Director-Financial Acting Pandoo, Mr Jaywant Stability attended Control, and Risk & Product i. ii. i. ii. • • • • Overseas Trainings/Courses/Seminars/Workshops Overseas Trainings/Courses/Seminars/Workshops Secretary/Acting of by Directors/Heads attended Divisions/Advisor Appendix IV Appendix Courses/Seminars/ Overseas Training Workshops

Appendices 194 Appendices 195

th IT Governance IT Governance th 6 Workshop on Effective on Effective Workshop Annual General Meeting of the Bank for for of the Bank Meeting Annual General th SADC Payment Systems Annual Regional Annual Regional Systems Payment SADC Oversight Systems and Payment Conference Payment SADC by hosted Meeting Committee Maseru, July 2018, 12 to 10 from Project, System and Lesotho; Service Sector Providers AACB-Official 2019 Currency Bank Foreign on Central Forum 28 June 26 to from AACB, by hosted Operations South Africa. Pretoria, 2019, Standard Chartered Global Supervisory Chartered Standard College Workshop College Global the with back-to-back Authority Regulation Prudential and by hosted 20 July to 19 Bank, from Chartered Standard UK; and London, 2018, and Afreximbank by hosted Training MANSA 2019, June 27 to 24 from Bank of Egypt, Central Egypt. Cairo, Committee Oversight System Payment SADC System Payment SADC by hosted Meeting September 13 to 11 from Committee, Oversight South Africa; and Pretoria, 2018, of an Inter- on the Development Workshop Integration Systems Payment Regional Inter-Regional and an Integrated Framework and AACB by hosted Strategy Mobile Payment 20 April 2019, to 18 from Bank of Egypt, Central Egypt. Cairo, International Settlements from 28 to 30 June 2019 in 30 June 2019 28 to from Settlements International of the Meeting with the together Basel, Switzerland, & Financial Management Institute Macroeconomic Africa (MEFMI) Regional and Southern of Eastern the 12 by followed Forum, Bank Governors Central and BCM Champions Joint Meeting hosted by by hosted Joint Meeting and BCM Champions June 2019, 14 to 11 from CCBG ICT Subcommittee, Ezulwini, eSwatini. MrsChief-Payments TilotmaJhurry, Gobin and MCIB, attended System Gopaul, Chief-AccountingMr Shardhanand and the attended Budgeting, Exchange Foreign Bank’s of a Central Audit Internal World by hosted Reserve Management Operations December 2018, 07 03 to from Bank Treasury, DC, USA. Washington Andrew Crockett Governors’ Roundtable for African for Roundtable Governors’ Crockett Andrew UK. in Oxford, 03 July 2019 to 01 from Bankers Central Miss Bibi Koraïsha Jeewoot, Chief-Risk& Jeewoot, Bibi Koraïsha Miss accompanied the Governor Control, Product the 89 to Mr Jayvind Kumar Choolhun, Chief-Payments Chief-Payments Choolhun, Kumar Mr Jayvind and MCIB, attended System Chief-Risk Ali Ismael Ghanty, & Mr Qayyum the attended Control, Product i. ii. i. ii. i. ii. • • • • • AML/CFT AML/CFT th ESAAMLG Task Task ESAAMLG th the 36 the CCBG ICT Subcommittee Annual Conference Conference Annual Subcommittee ICT CCBG th accompanied the Governor to a signing ceremony ceremony a signing to the Governor accompanied between of Understanding the Memorandum for Banking the Bank of Mauritius and the China Regulatory Commission on and Insurance sharing in the area and information cooperation supervision,banking of the with meeting a and in and 23 JanuaryBank of China on 22 2019 China; Beijing, Seminar on de France the Banque attended et Institut Bancaire by hosted Systems Payment France, de Banque and International Financier Island; and Reunion 2019, March 14 to 12 from Fintech Balancing on Conference the attended Opportunities the Bali Implementing and Risks: IMF and Bank of by hosted Agenda Fintech Gaborone, 25 June 2019, to 24 from Botswana, Botswana. attended the World Bank Payment Week hosted hosted Week Bank Payment the World attended Negara Bank with collaboration in Bank World by Kuala 05 December 2018, 03 to from Malaysia, Malaysia; Lumpur, Conference on “Cybersecurity: Conference Coordinating in the global the financial sector efforts protect to on 10 de France, Banque by hosted economy” France. Paris, 2019, May hosted by CCBG ICT Subcommittee, from 18 to to 18 from CCBG ICT Subcommittee, by hosted South Africa; and Pretoria, 22 February 2019, 24 Innovation and Cybersecurity Conference 2018 2018 and CybersecurityInnovation Conference 28 South African Reserve Bank, from by hosted South Africa; Johannesburg, 2018, 30 August to Mr Mardayah Kona Yerukunondu, former Head- former Yerukunondu, Kona Mr Mardayah Services,Legal attended Force of Senior Officials Meeting and 4 Officials Meeting of Senior Force Mr Mooneesing Janna Naikeny, Advisor to Advisor to Mr Mooneesing Janna Naikeny, the accompanied Management in Technology, the Mobile World to Second Deputy Governor Co Ltd, Technologies Huawei by hosted Conference Spain. Barcelona, 28 February 2019, 25 to from Mr Jean Claude Benoit Chamary, Chief- Supervision, attended Mr Dhanesswurnath Thakoor, Assistant Director- Thakoor, Mr Dhanesswurnath and MCIB, System Payments Public Private Sector Dialogue Meeting hosted hosted Meeting Dialogue Sector Public Private 2018, September 08 02 to from ESAAMLG, by Seychelles. Assistant Fong, Jose Li Yun Mr Ng Cheong attended Director-IT, ii. iii. iv. i. iii. ii. i. • • • • • Overseas Trainings/ Courses/ Seminars/ Workshops Courses/ Seminars/ Workshops Overseas Trainings/ Chiefs by attended SADC CCBG SADC Business Continuity CCBG Banking SupervisionCCBG Training on Basic Dynamic Stochastic Stochastic on Basic Dynamic Training the the International Programme on Programme the International the the Supervisorythe Supervisors for College of International Programme on Financial Stability on Financial Programme International by hosted Regulation and Macro-Prudential Reserve 08 March Bank Staff 05 to from College, Chennai, India; and 2019, the and Panel Review of the Research Meeting hosted Subcommittee CCBG Macroeconomic 26 June to 24 from Subcommittee, CCBG by Africa. South Pretoria, 2019, Mr Ashvin Kumar Ramduny, Chief-Payments Chief-Payments Ramduny, Kumar Mr Ashvin Payment the SADC attended and MCIB, System Bank World by hosted Workshop Integration System 28 from Team, Project System Payment and SADC South Africa. Pretoria, 2019, 29 March to Chief-Financial Ramnarainsing, Mr Sanjay the Business attended Operations, Markets ContinuityImplementer Lead Management System African by South hosted Training Certification 06 July 2018, 02 to from Reserve Bank Academy, South Africa. Pretoria, Ramnauth, Chief-Financial Mr Keshwarajsingh the attended Operations, Markets by hosted Subcommittee Financial Markets 08 to 07 from of the CCBG in SADC, Secretariat Angola. Benguela City, February 2019, Mr Harryram Chief-Supervision, Ramsurn, attended Supervision and Regulation of Non-Banking - Issues and Challenges Financial Companies Reserve Bank Staff by 25 hosted College, from Chennai, India. 2019, March 01 February to Rutah, Sharma Mr Chandradeo Chief- Supervision, the attended Certification Lead Implementer Management System South African Reserve Bank by hosted Training South Pretoria, 06 July 2018, 02 to from Academy, Africa. Mr Ghanish Beegoo, Senior Analyst-Statistics, attended Subcommittee Meeting and Regional Workshop Workshop and Regional Meeting Subcommittee South by hosted Crisis Resolution on Cross-Border 11 African Reserve Bank and Bank of England, from South Africa. Pretoria, February 2019, 15 to Mrs Hemlata Nundoochan, Chief-Supervision, attended outside banking operations Limited’s Group ABSA Authority Prudential of South by Africa hosted September 07 05 to African Reserve Bank, from South Africa. Pretoria, 2018, MrsMalini Ramdhan, Chief-Supervision, attended ii. iii. • • • • • • • • Overseas Trainings/ Courses/ Seminars/ Workshops Courses/ Seminars/ Workshops Overseas Trainings/ Senior Analysts by attended Meeting of Meeting th Business ContinuityBusiness the ESAAMLG Task Force of Force Task ESAAMLG th Training on Early Warning Models to avoid avoid to Models Warning on Early Training in Banks: An Application Financial Distress by hosted Analysis Data of Multinomial Panel 01 MonetaryCOMESA from and SADC, Institute Kenya; Nairobi, 2018, 05 October to SADC Committee of Central Bank Officials Bank Central of Committee SADC and April 2019 on 03 and 04 Meeting the to Deputy the First accompanied Governor Bank of Central Committee of the SADC Meeting South Africa. Pretoria, 05 April 2019, Governors, the SADC Committee of Central Bank Governors Bank Governors of Central Committee the SADC and Lesotho; Maseru, 2018, September on 07 attended Seminar on Crisis Management and Management Crisis on Seminar attended and Academy SARB by hosted Crisis Resolution 2018, October 19 to 15 South, from AFRITAC South Africa; Pretoria, a signing ceremony to the Governor accompanied between of Understanding the Memorandum for and the China Banking the Bank of Mauritius Regulatory on Commission and Insurance sharing in the area and information cooperation supervision, banking of the with meeting a and in 22 and 23 JanuaryBank of China on 2019 China; and Beijing, the 37 attended Senior Officials Meeting back-to-back with back-to-back Senior Officials Meeting hosted Event Assessor Training ESAAMLG/FATF Arusha, April 2019, 18 to 07 from ESAAMLG, by Tanzania. Officials Bank Central of Committee SADC and 2018 06 September on 05 and Meeting 47 the to the Governor accompanied Dr Ashwin Kumar Madhou, Chief-Economic Dr Ashwin Kumar the CCBG attended & Research, Analysis & Meeting Subcommittee Macroeconomic by hosted Workshop Convergence Macroeconomic 26 February from of the CCBG in SADC, Secretariat Mozambique. Maputo, 2019, March 01 to Dr Ashwin Moheeput, Chief-Financial Stability, attended Mrs Rajshri Devi Jutton-Gopy, Chief-Legal Chief-Legal Jutton-Gopy, MrsDevi Rajshri Services, Mr Gawtam Raiy Kallychurn, former Chief- former Mr Gawtam Raiy Kallychurn, Risk & Product SecurityInformation Officer, attended Control, Certification Lead Implementer Management System South African Reserve Bank by hosted Training South Pretoria, 06 July 2018, 02 to from Academy, Africa. Chief-Economic Mr Neetyanand Kowlessur, attended Analysis & Research, i. ii. i. ii. iii. i. • • • • •

Appendices 196 Appendices 197

th Validation Validation MAS Banking th 27 General Assembly, Assembly, General th General Assembly Meeting hosted by by hosted Assembly Meeting General th Governing Board Meeting of the IILM Meeting Board Governing Islamic Financial Stability 34 Forum, nd th Technical Meeting on the Regional Integration Integration on the Regional Meeting Technical SWIFT African Regional Conference hosted by by hosted Conference African Regional SWIFT Meeting of Supervisory of Meeting Bank of College for Reserve on 09 Bank of India, by hosted Baroda Mumbai, India; July 2018, Book Issues and Market on Trading Conference Financial Stability by hosted Infrastructure of Securities Organisation & International Institute 2018, November 16 to 14 Commissions, from and Basel, Switzerland; Global College 2019 Bank Chartered Standard on 26 Authority, Regulation Prudential by hosted UK. London, June 2019, Business Continuity Lead Management System by hosted Training CertificationImplementer 02 from South African Reserve Bank Academy, South Africa; and Pretoria, 06 July 2018, to 19 International Islamic Liquidity & Management International 28 April Islamic Financial Stability from Board, visit at one-day by preceded 2019, May 01 to Kuala on 26 April 2019, Malaysia, Bank Negara Malaysia. Lumpur, IFSB Council Meeting, 17 IFSB Council Meeting, 22 and 10 Mr Sandiren Vadeevaloo, Senior Analyst-Senior Vadeevaloo, Sandiren Mr Supervision, attended Analyst-Appadu, Rao Abhimanyou Mr Supervision, the attended Mrs Falzana Atchia, Analyst-Statistics, Atchia, attended Mrs Falzana the by hosted Index 2063 Agenda and Indicators 2018, September 21 to 17 Union,African from Uganda. Kampala, attended Beegun, Analyst-IT, Mr Rajesh Kumar the Ghana. Accra, 2019, 20 June to 18 from SWIFT, the attended Analyst-IT, Beekun, Mr Ibne Faraz 2018 and CybersecurityInnovation Conference 28 to South African Reserve Bank, from by hosted South Africa. Johannesburg, 2018, 30 August Mr Minesh Bhundoo, Analyst-Human Resources, attended Supervisors’ Training Programme hosted by by hosted Programme Supervisors’ Training 30 25 to Monetary from Authority of Singapore, Singapore. 2018, November Mrs Mahima Bhurtha, Analyst-Economic the attended Analysis & Research, Panel of “Application on manual a of Workshop of Transmission Analysis for and VECM SVAR VAR, i. ii. iii. i. ii. • • • • • • • Overseas Trainings/ Courses/ Seminars/ Workshops Courses/ Seminars/ Workshops Overseas Trainings/ Analysts and Communications Officer by attended the Course on the Role and Role the on Course the Validation Workshop on the Workshop Validation the Annual Meeting of the Assembly of of Annual Meeting Meeting of the FSB Regional Consultative Consultative of the FSB Regional Meeting st th IADI 2019 Biennial Research Conference Conference Biennial Research IADI 2019 Financial Resilient Building a More “Towards and in Deposit Insurance - Challenges System International by hosted Bank Resolutions” 24 23 to from Association of Deposit Insurers, Basel, Switzerland. 2019, May International Programme on Banking Regulation Regulation on Banking Programme International Reserve Bank Staff by 17 hosted College, from Chennai, India; and December 2018, 21 to attended the 2019 Community of African the 2019 attended and Meeting Banking Supervisors Conference 11 to 10 from Bank of Egypt, Central by hosted Egypt. Cairo, June 2019, Group for Sub-Saharan Africa hosted by South by Africa hosted Sub-Saharan for Group December 2018, African Reserve Bank, on 11 South Africa; and Johannesburg, attended the Seminar on Crisis Management Crisis on Seminar the attended South African by hosted and Crisis Resolution South, and AFRITAC Reserve Bank Academy South Pretoria, 2018, October 19 to 15 from Africa; to the Second Deputyaccompanied Governor the 14 Mr Karankumar Pitteea, Senior Analyst- Pitteea, Mr Karankumar the attended Economic Analysis & Research, the Association of African of Annual Meetings Governor and accompanied 2018 Banks for Central the 41 to General Equilibrium Modelling and Time Modelling and Series Equilibrium General Monetaryof School Kenya by hosted Analysis to 04 Studies Monetary and COMESA from Institute, Kenya. Nairobi, 2019, 08 March Senior Analyst-Statistics,Mr Satishingh Jugoo, attended Implementation of Trade in Services Statistics of Trade Implementation July 2018, 13 to 11 from SADC, by hosted Template South Africa. Johannesburg, Lauricourt,Miss Marie Medgee Senior Analyst- Supervision, attended Functioning of Central Bank hosted by National by Bank hosted of Central Functioning under the ITEC/ of Bank Management Institute Pune, July 2018, 14 02 to from Programme, SCAAP India. Senior Analyst- Rughoobur, Mr Dhirajsingh Supervision, Governors of the Association of African Central Central of the Association of African Governors Bank of Egypt, Central and AACB by Banks hosted El-Sheikh, Egypt. Sharm 2018, 09 August 05 to from Mrs Aline Pyne, Senior Analyst-Rodrigues Marie attended Office, ii. i. iii. i. ii. • • • • • Reserve Course on Bank on Course Training on Advanced on Advanced Training Meeting of the Committee Committee of the Meeting MAS Banking Supervisors’ th 27 the Meeting of SupervisoryMeeting Bank of College for Reserve Bank of India, on 09 by hosted Baroda Mumbai, India; and July 2018, on Domestication of Basel III with Training particular Crisis Regulatory on Post Emphasis Monetary COMESA by hosted Framework Nairobi, 2018, 26 October 22 to from Institute, Kenya. African Financial Markets Initiative Annual Initiative African Financial Markets th MrsNitisha Mihdidin, Analyst-Supervision, attended Analyst-Legal Mootoosamy, Mr Kumaravel Services, the attended Legal Subcommittee Bank Governors of Central 03 02 to of CCBG, from Secretariat by hosted Ezulwini, eSwatini. 2018, August Analyst- Allan Nicolas Ng Cheong Vee, Mr Dany the attended Control, Risk & Product Asset by Management Seminar followed and Asset 21 to 10 from Programme, Management Associate and Basel, Switzerland. Brunnen June 2019, Training Programme hosted by Monetary by Authority hosted Programme Training 2018, 30 November to 25 from of Singapore, Singapore. Miss Yuvna Hemoo, Analyst-Financial Markets Hemoo, Analyst-Financial Markets Miss Yuvna the attended Operations, by hosted Finance Structured and Derivatives 20 to Reserve Bank of India Staff 17 College, from India. Chennai, 2018, September Singh Jhamna, Jany Lyna Miss Monysha the attended Analyst-Risk Control, & Product Human Talent and Management, Operational Risk Educational BlackRock by hosted Excellence UK. London, June 2019, 14 to 10 from Academy, the attended Analyst-IT, Kallychurn, Mr Ranjeet Platform on “Building a Fintech Workshop Fintech - Opportunities and Challenges” Seychelles for and World of Seychelles Bank Central by hosted Seychelles. 2019, May 10 08 to Bank, from Analyst- Anand Koonjul, Prakash Mr Ved the attended Operations, Financial Markets 7 Mr Sahadeosing Gungabissoon, Analyst- Gungabissoon, Mr Sahadeosing Supervision, the attended Management Risk Management-Focus: Financial National by hosted II and III and Accord and Basel ITEC/SCAAP Management under of Bank Institute Pune, India. January 2019, 19 to 07 from Programme, Workshop hosted by African Development Bank’s Bank’s African Development by hosted Workshop 29 to from Group, Initiative African Financial Market Zambia. Livingstone, 2018, October 31 Maistry, Analyst-Supervision, Devi Mrs Lutchmee attended i. ii. • • • • • • • • • Validation Validation Seminar on Anti-Money Laundering Seminar on Anti-Money Seminar for Central Bankers “Formulation “Formulation Bankers Central Seminar for th Belt and Road Forum for International International for Forum Road and Belt nd 12 FINTECH Conference hosted by Financial Sector Financial Sector by hosted Conference FINTECH a signing ceremony for the Memorandum of the Memorandum for a signing ceremony of Mauritius the Bank between Understanding Regulatory China Banking and Insurance the and information and cooperation Commission on of banking supervision,sharing in the area and and 23 with the Bank of China on 22 a meeting China; and in Beijing, January 2019 2 The Evolution of Portfolio Construction hosted hosted Construction of Portfolio The Evolution to 17 from Educational Academy, BlackRock by Hong Kong. June 2019, 21 Cooperation from 25 to 27 April 2019, Beijing, Beijing, April 2019, 27 25 to from Cooperation China. and Factor Allocation on Asset Programme BlackRock by hosted Based Investing 02 to 29 October from Educational Academy, and USA; York, New 2018, November of Monetary Policy” hosted by COMESA Monetary COMESA by of Monetary hosted Policy” of Monetary School Studies, and Kenya Institute Kenya. Nairobi, 2018, August 31 to 27 from Officer- Communications Chan YietMiss Elisa Po, Relations and Communications, International to accompanied Governor the Examination hosted by South African Reserve Bank by Examination hosted 28 January from Authority, and Prudential Academy South Africa. Pretoria, February 2019, 01 to and Implementation of Monetary Policy in the Euro of Monetary in the Euro and Implementation Policy 09 to Bank, from Central European by hosted Area” Germany. Frankfurt, July 2018, 13 attended Gobin, Analyst-IT, Devi Miss Archana the 22 to from Bank Group, and World Advisory Centre Vienna, Austria. 2019, 23 May Mr Manod Gopaul, Analyst-Supervision, the attended Mr Nandkumar Daworaz, Analyst-Financial Daworaz, Mr Nandkumar the attended Operations, Markets Panel of “Application on manual a of Workshop of Transmission Analysis for and VECM SVAR VAR, Monetary COMESA by of Monetary hosted Policy” School of Monetary Studies, and Kenya Institute Kenya. Nairobi, 2018, August 31 to 27 from Analyst-Statistics, Dhurmea, Suyash Mr attended the Mr ChetanandMr Christna, Analyst-Accounting and on Applying the Workshop attended Budgeting, World by hosted Portfolios Investment IFRS to National Bank of by and co-hosted Bank Treasury Sinaia, 2018, 28 September to 24 from Romania, Romania. Analyst-Reserve Mr Shehzaad Chutoo, Management, attended i. ii. ii. i. • • • • • • •

Appendices 198 Appendices 199 Training on Training Seminar on Workshop on Workshop IT Governance and BCM IT Governance th 6 Seminar on Anti-Money Laundering Seminar on Anti-Money the MANSA Training hosted by Afreximbank and Afreximbank by hosted Training MANSA Fixed Income Advanced Training and Training and Training Training Income Advanced Fixed Workshop on Risk Budgeting in Active Portfolio Portfolio in Active Budgeting Risk on Workshop by hosted Institutional Investors for Management 28 to 24 from RAMP, and Treasury Bank World DC, USA. Washington, June 2019, Mr Vasan Kumar Ranlaul, Analyst-IT, attended attended Ranlaul, Analyst-IT, Kumar Mr Vasan the 2019, June 11 to 10 from Egypt, Bank of Central Egypt. Cairo, Rashpassing, Analyst- Mr Roopeswarchanda the attended IT, Champions Joint Meeting hosted by CCBG ICT CCBG by hosted Joint Meeting Champions Ezulwini, June 2019, 14 to 11 from Subcommittee, eSwatini. Rughoo, Analyst-Supervision,Miss Komal attended Analyst-Mrs Seebaluck-Beerbul, Kaajal BCM and the 6th IT Governance attended IT, CCBG ICT by hosted Joint Meeting Champions Ezulwini, June 2019, 14 to 11 from Subcommittee, eSwatini. Soon Chan Ah Kine, Bank Officer Mr Stephan I-Supervision,Grade the attended by hosted Crisis Management and Crisis Resolution 19 to 15 South, from and AFRITAC Academy SARB South Africa. Pretoria, 2018, October Bank Officer Aungraheeta, Miss Bibi Zoya I-Supervision,Grade the attended with Risk of Credit and Off-site Review “On-site by hosted on IFRS 9 and ICAAP Special Emphasis 03 29 April to MonetaryCOMESA from Institute, Kenya. Nairobi, 2019, May I-Economic Mr AtishGrade Babboo, Bank Officer the attended Analysis & Research, Modelling of African Macroeconomic Advanced Bank, African Development by Economies hosted South Pretoria, 2018, 28 September to 17 from Africa. Bank former Deeksha Beeharry, Mrs Yashtee attended Control, I-Risk & Product Officer Grade the Deutsche by hosted Investment on Passive to 12 from Gesellschaft fur Wertpapier-Sparen visit at the one-day by preceded 2019, March 15 UK. London, 2019, March Deutsche Bank, on 11 Examination hosted by SARB Academy and Academy SARB by Examination hosted February 28 January 01 from to Authority, Prudential South Africa. Pretoria, 2019, ii. • • • • • • • • Overseas Trainings/ Courses/ Seminars/ Workshops Courses/ Seminars/ Workshops Overseas Trainings/ 1 Bank Officers Grade by attended ESAAMLG ESAAMLG th Workshop on Workshop 37 Prudential Regulation Authority’s Authority’s Regulation Prudential the MAS Information Technology Supervision Technology Information MAS SADC Payment Systems Annual Regional Annual Regional Systems Payment SADC th Official Institution Symposium: Portfolio Institution Symposium: Official Opportunities, and ESG:Optimisation Trends, Educational BlackRock by Solutions hosted UK. London, 2019, May 16 to 13 from Academy, Programme on Advanced Fixed Income hosted hosted Income Fixed on Advanced Programme to 17 from Academy, Educational BlackRock by and USA; York, New 2018, September 21 9 Seminar on Fixed Income hosted by Deutsche by Income hosted Seminar on Fixed 09 to from Gesellschaft fur Wertpapier-Sparen, a one- by London, UK, followed 2018, October 11 October 12 on Bank Deutsche at training day Germany; and Frankfurt, 2018, International Seminar on “Ageing Populations: Populations: Seminar on “Ageing International the Needs to and Responding Understanding and FinCoNet of Older Financial Consumers” and open meetings Standing Committee on Force Task G20/OECD by hosted meeting and FinCoNet, Financial consumer protection France. Paris, 2019, March 27 26 to from Workshop 2018 hosted by Monetary by Authority hosted 2018 Workshop 2018, November 14 to 12 from of Singapore, and Singapore; Mrs Shakuntala Devi Ramanah, Analyst-Ramanah, Mrs Devi Shakuntala Supervision,the attended African Regional Supervisory Regional African Standard for College from Bank of Tanzania, by Bank hosted Chartered Tanzania. Zanzibar, 2018, October 31 30 to Analyst- Mohammad Peerbocus, Mr Yahseen Reserve attended Management, Mr Premchand Nundlall,Mr Premchand Analyst-Supervision, attended Task Force of Senior Officials Meeting hosted hosted of Senior Officials Meeting Force Task Arusha, 2019, April 12 to 07 from ESAAMLG, by Tanzania. Analyst-ReserveMiss Meenakshi Ramchurn, the attended Management, by hosted Financial Markets in China’s Investing March 01 25 February to from Bank Treasury, World DC, USA. Washington, 2019, Miss Yogeeta Devi Ramphul, Analyst-Supervision, Devi Miss Yogeeta attended Mrs Deepmala Ramrup, Analyst-IT, attended attended MrsAnalyst-IT, Ramrup, Deepmala the Oversight Systems and Payment Conference Payment SADC by hosted Meeting Committee Maseru, July 2018, 12 to 10 from Project, System Lesotho. Analyst-Risk Bakhoree, Ramudit Mrs & Preethee attended Control, Product ii. i. i. i. ii. • • • • • • •

th 28 Fixed Fixed Training Training the CCBG Banking SWIFT African Regional Conference Conference African Regional SWIFT the Banque de France Seminar on Payment Systems Systems Payment on Seminar France de Banque Training on Advanced Derivatives and Structured and Structured Derivatives on Advanced Training Reserve Bank Staff by Finance hosted College, Chennai, India; 2018, 20 September to 17 from and Seminar and Training-Asset Global Investor by hosted Allocation & Sustainable Investing Deutsche Gesellschaft fur Wertpapier-Sparen, Germany. Frankfurt, 28 June 2019, to 24 from Mrs Doushy Jeeana Dawoodharry, Bank Officer Bank Jeeana Dawoodharry, Mrs Doushy MCIB, attended and System I-Payments Grade the International Financier et Institut Bancaire by hosted 2019, March 14 to 12 from de France, and Banque Island. Reunion Grade Bank Officer Jhumun, Miss Madhvi I-Supervision, the attended Supervision and Regional Meeting Subcommittee Crisis Resolution on Cross-Border Workshop Reserve South African Bank and Bank by hosted Pretoria, February 2019, 15 to 11 of England, from South Africa. Bank Officer Grade Juman, Miss Humairaa the and MCIB, attended System I-Payments Financial Technologies: Seminar on Emerging by hosted and Regulation Balancing Innovation 20 to 18 East,from AFRITAC and South AFRITAC South Africa. Pretoria, 2019, March Bank Burumdoyal, Koosha MrsJaiwantee and MCIB, System 1-Payments Officer Grade attended Accra, 20 June 2019, to 18 from SWIFT, by hosted Ghana. Bank Mr Muhammad Maahi Lall Beeharry, I-Supervision,Officer Grade the attended MAS Banking Supervisors’ Training Programme Programme MAS Banking Supervisors’ Training 23 Monetary from by Authorityhosted of Singapore, Singapore. 28 June 2019, to Bank Officer Grade Lanfray, Yohann Mr Francois I-Reserve Management, attended Lobin, Bank Officer Grade Miss Navisha I-Reserve the Management, attended on Passive and Training Training Income Advanced Deutsche Gesellschaft by fur hosted Investment 2019, March 14 to 12 from Wertpapier-Sparen, Bank, on visit at the Deutsche one-day by preceded London, UK. 2019, March 11 Mrs Bank Officer Mehisha Luchmadu-Imrit, I-Supervision, Grade attended Workshop on AML/CFT Risk Based Supervision on AML/CFT Risk Workshop in collaboration Secretariat ESAAMLG by hosted 30 May to 27 from Bank of Seychelles, with Central Seychelles. 2019, i. ii. • • • • • • • • the Risk-Focused Risk-Focused Course on the Role on the Role Course On-site Visit the at On-site Understanding the Understanding Training on “On-site on “On-site Training Seminar on Emerging Seminar on Emerging Mr Larveen Bhujun, Grade Bank Officer I-Supervision, the attended ABSA Group Limited and Africa SupervisoryLimited Group ABSA from separation pertainingCollege AGL’s to Authority Prudential of South by hosted Plc Barclays 2019, May 10 09 to African Reserve Bank, from South Africa. and Pretoria, Johannesburg Bank Officer Grade Miss Geeleena Bissessur, the attended Operations, I-Financial Markets Primary-DealerStrengthening Training Systems Reform Africa Budget Collaborative by hosted Casablanca, 2019, April 10 to 09 from Initiative, Morocco. Bank Officer Dabeesing, Fabrice Mr Percy the I-Banking, attended Grade National by Bank hosted of Central and Functioning and under the ITEC of Bank Management Institute Pune, July 2018, 14 02 to from Programme, SCAAP India. Bank Officer Grade Miss Nisha Dharkhan, I-Supervision, the attended and Balancing Innovation Financial Technologies: AFRITAC and South AFRITAC by hosted Regulation South Pretoria, 2019, 20 March to 18 East, from Africa. Bank Officer Grade Dwarka, Miss Kevina I-Supervision, the attended with Special Risk Credit of and Off-site Review COMESA by hosted on IFRS 9 and ICAAP Emphasis 2019, 03 May 29 April to Monetary from Institute, Kenya. Nairobi, Mrs Grade Officer Bank Edoo, Jazbeen Banu the attended I-Economic Analysis & Research, SADC by hosted Financial Inclusion Forum SADC and in partnership Trust with FinMark Secretariat 25 July to 24 Banking Association, from SADC South Africa. Pretoria, 2018, Bank Officer Grade Fowdur, Mrs Soobhadra I-Statistics, the attended South African by hosted Course Financial Markets Pretoria, June 2019, 21 to 19 Reserve Bank, from South Africa. Gopaul, Bank Officer Grade Mr Yashilall I-Supervision, the attended Training Transactions Supervision Border of Cross South African Reserve Bank Academy, by hosted South Africa. Pretoria, July 2018, 27 23 to from Mrs Gungah, Bank Officer Grade Vimlawtee I-Accounting attended Budgeting, and Workshop on Settlement and Custodian Relations Relations Custodian and Settlement on Workshop Bank and National Bank of Georgia, World by hosted Tbilisi, Georgia. 2018, September 14 to 10 from • • • • • • • • •

Appendices 200 Appendices 201 Banque de France Seminar on de France Banque the Governor to the Meeting of the Committee of the Committee the Meeting to Governor Training on Enhancing the Safety and Efficiency and Safety the Enhancing on Training SADC Payment Systems Course hosted by South by hosted Course Systems Payment SADC Mrs Bank Officer Ramkissoon, Mridula Daibee MCIB, attended and System I-Payments Grade the September 12 to 10 African Reserve from Bank, South Africa. Pretoria, 2018, Bank Officer Ramkooleea, Mrs Sarita Devi attended and MCIB, System I-Payments Grade the of the role The System: of the National Payments African Reserve South Bank by hosted overseer October 05 to 01 from Centre, and Toronto Academy South Africa. Pretoria, 2018, Bank Officer Seblin, Mr Damien Christophe I-ReserveGrade the attended Management, in Portfolio Techniques on Advanced Workshop from Bank Treasury, World by Management hosted DC, USA. Washington 2018, 09 November 05 to Bank Seedoyal, NainamMiss Priyadarshinee and MCIB, System I-Payments Officer Grade attended Payment Systems hosted by Institut Bancaire et et Institut Bancaire by hosted Systems Payment from France, de and Banque International Financier Island. Reunion 2019, March 14 to 12 I- Sewak, Bank Officer Grade Miss Tayushma accompaniedEconomic Analysis & Research, the preceded in SADC, Bank Governors of Central Bank of Central of the Committee the meeting by 07 to 05 from by CCBG and AACB, Officials hosted Lesotho. Maseru, 2018, September Bank Officer Grade Yun, Tai Mr Cedric Wong the attended Operations, I-Financial Markets of and Fundamentals on Governance Workshop by Reserve hosted Managers Allocation for Asset 08 February 2019, to 04 from Bank Treasury, World DC, USA. Washington • • • • • •

th 9 MAS Banking th 28 Annual Meeting of the of Annual Meeting st Course on “The Role of Central Banks in a in Banks Central “Theof on Role Course Annual Meetings of the Association of African of Annual Meetings and accompanied 2018 Banks for Central the 41 to Governor Assembly of Governors of the Association of Assembly of Governors and AACB by hosted Banks African Central 09 August 05 to from Egypt, Bank of Central El-Sheikh, Egypt; Sharm and 2018, Banking Border on Cross Programme CommunitySupervision, by of African hosted 22 February to 18 Banking Supervisors, from South Africa. Cape Town, 2019, Mr Rajeev Luchmun, Bank Officer Grade Grade Bank Officer Luchmun, Mr Rajeev the attended Operations, Markets I-Financial hosted Course the Financial Markets Understanding June 21 to 19 Reserve South African Bank, from by Africa. South Pretoria, 2019, Miss Bihisht Mautadin, Bank Officer Grade the attended & Research, I-Economic Analysis Supervisors’ Training Programme hosted by by hosted Programme Supervisors’ Training 28 23 to Monetary from Authority of Singapore, Singapore. June 2019, Officer Bank MrsPurmessur-Dookhit, Ouma attended I-Economic Analysis & Research Grade the Experience” hosted – The Egyptian Dynamic Market January 24 to 13 from Banking Institute, Egyptian by Egypt. Cairo, 2019, COMESA Committee on Statistical Matters Meeting Meeting Statisticalon Matters Committee COMESA 2018, 09 November to 07 COMESA, by from hosted Zambia. Lusaka, Bank Officer Grade Mootealloo, Mr Avisen the and MCIB, attended System I-Payments Human Talent and Management, Operational Risk Educational BlackRock by hosted Excellence London, UK. 2019, June 14 to 10 from Academy, Grade Mr Arjun Munbodh, Bank Officer I-Supervision, attended Miss Nirmala Nunkoo, Bank Officer Grade Bank Officer Grade Nunkoo, Miss Nirmala 1-Supervision, the attended i. ii. • • • • • • Course on Course Workshop on Workshop Course on Inclusive Inclusive on Course Workshop on FINTECH and on FINTECH Workshop Course on Financial Programming on Financial Programming Course National Risk Assessment Validation Assessment Validation National Risk the the 2-day conference themed “Mauritius International International “Mauritius themed conference 2-day by Looking” hosted Financial Centre-Forward 20 to Financial Services 19 Commission, from and Balaclava; 2018, September Fiscal Institutions on Strengthening Workshop from ATI, by hosted and Managing Fiscal Risks Ebene. 2018, October 12 08 to Banking for Framework Legal on Course from ATI, Supervision by hosted and Resolution and Ebene; February 2019, 15 to 11 AML/CFT Supervision to based Approaches Risk Ministry by hosted of Financial Services and with Financial in collaboration Good Governance 2019, April 26 to 22 Services from Commission, Ebene. Banking for Framework Legal on Course from ATI, Supervision by hosted and Resolution and Ebene; February 2019, 15 to 11 Mrs Nancy Powkeem Lo Tiap Kwong, Chief- Lo Tiap Kwong, Mrs Nancy Powkeem Statistics, the attended 2018, 26 October to 15 from ATI, by hosted Growth Ebene. Chief-Economic Madhou, Dr Ashwin Kumar the attended Analysis & Research, Mrs NajmaNabee, Analysis Chief-Economic attended and Research, Mrs Hemlata Nundoochan, Chief-Supervision, attended Bank and Ministry World of by hosted Workshop 07 from Financial Services and Good Governance, Flic en Flac. 08 June 2019, to and System Chief-Payments Mr Aswin Ramduny, the MCIB, attended June on 01 Ministry by hosted of Tourism, Tourism Flic en Flac. 2019, Chief-Financial Ramnauth, Mr Keshwarajsingh the attended Operations, Markets Afritac by hosted Frameworks Liquidity Forecasting Ebene. June 2019, 07 03 to South, from Analyst-Supervision,Senior Bullyraz, Ravishin Mr attended Mr Satishingh Jugoo, Senior Analyst-Statistics, attended August 17 06 to from ATI, by hosted and Policies Ebene. 2018, Miss Marie Medgee Lauricourt, Senior Analyst- Supervision, attended Fiscal Policy Analysis hosted by ATI, from 04 to 15 15 to 04 from ATI, by hosted Analysis Policy Fiscal Ebene. February 2019, i. ii. i. ii. i. • • • • • • • • • Local Courses/Seminars/Workshops attended by by attended Local Courses/Seminars/Workshops Senior Analysts SADC CapacitySADC 2-day conference conference 2-day 2-day conference conference 2-day the 2-day conference conference 2-day the Meeting on the India-Mauritius Meeting th 7 Course on Fiscal Framework hosted hosted on Fiscal Framework Course the the Pension Funds and Alternative Investments Investments Alternative and Funds Pension rd by ATI, from 24 September to 05 October 2018, 2018, 05 October to September 24 from ATI, by Ebene. Chief-Legal Services, Mrs Rajshri Jutton-Gopy, attended Dr Chiragra Tapas Kumar Chakrabarty, former Chakrabarty, former Kumar Tapas Dr Chiragra and Reserve Markets Director-Financial attended Management, Financial Centre- International themed “Mauritius Services Financial by Looking” hosted Forward 2018, September 20 to 19 Commission, from Balaclava. Pampusa, Heerah Mrs Marie Agnes Marjorie Operations Markets Director-Financial Acting and Reserve the attended Management, 3 Conference hosted by National Productivity and Productivity National by hosted Conference 20 Bank, from Council and World Competitiveness Flic en Flac. 2019, March 21 to Head- former Yerukunondu, Kona Mr Mardayah Legal Services, the attended Financial Centre- themed “Mauritius International Financial Services by Looking” hosted Forward 2018, 20 September to 19 Commission, from Balaclava. MrsSudha Hurrymun, Assistant Director- Supervision, the attended Financial Centre- themed “Mauritius International Financial Services by Looking” hosted Forward 2018, 20 September to 19 Commission, from Balaclava. Mr ChitanandaChief-Statistics, Ellapah, attended Comprehensive Economic Cooperation and Economic Cooperation Comprehensive Ministry by hosted of Foreign Partnership Agreement Trade, and International Integration Regional Affairs, Flic en Flac. 2018, 23 November to 19 from Chief-Risk former Mr Gawtam Raiy Kallychurn, the attended Control, & Product Building Workshop on CybersecurityBuilding Workshop and SADC Cybersecurity Regional Sector Financial on Drill Board, National Computer Surveillance by hosted Ebene. 2018, September 13 to 10 from • • • • • • • Local Courses/Seminars/Workshops attended by by attended Local Courses/Seminars/Workshops of Division Directors/Heads Acting Director/ Appendix V Appendix Local Courses/Seminars/Workshops Local Courses/Seminars/Workshops attended by by attended Local Courses/Seminars/Workshops Chiefs

Appendices 202 Appendices 203 hosted hosted hosted Workshop Workshop Workshop on Workshop the Workshop on Liquidity Workshop Course on Financial Development on Financial Development Course Seminar on Impact of Basel III reforms of Basel III reforms Seminar on Impact of Basel III reforms Seminar on Impact the the the Meeting on the India-Mauritius Comprehensive Comprehensive India-Mauritius the on Meeting Meridian Training Programme hosted by by hosted Programme Meridian Training th Policies on Financial Sector Workshop Economic Cooperation and Partnership Cooperation Economic Affairs, Ministry by hosted of Foreign Agreement Trade, International and Integration Regional Flac; and Flic en 2018, November 23 to 19 from Survey with Technical Productivity Workshop: NPCC by hosted Bank World from Assistance Quatres 2019, March Bank, on 21 and World Bornes. 7 Policies on Financial Sector Workshop Ebene; and 2018, August 31 20 to from ATI, by Workshop Assessment Validation National Risk Bank and Ministry World of Financial by hosted 08 to 07 from Services and Good Governance, Flic en Flac. June 2019, Mr Doorgesh Choonucksing, Facilities Officer- Choonucksing, Facilities Mr Doorgesh attended Management, Facilities on Lightning Protection and Earthing hosted by and Earthing by hosted on Lightning Protection on 25 February 2019, Centre, Training Regional Reduit. Analyst-Statistics, Dhurmea, Suyash Mr attended the Ebene. 2018, August 31 20 to from ATI, by attended Gobin, Analyst-IT, Devi Miss Archana the Ministry from of Finance & Economic Development, Ebene. 2018, 05 September to August 27 Analyst-Supervision, Gokool, Mrs Tameshwaree attended of Basel II/III in Emerging in the implementation by hosted Economies and Developing Market Ebene. 20 July 2018, to 16 from South, Afritac Analyst-Financial Gungaram, Mrs Bindoomatee the attended Operations, Markets Afritac by hosted Frameworks Liquidity Forecasting Ebene. June 2019, 07 03 to South, from Analyst-Financial Hemoo, Markets Miss Yuvna the attended Operations, South, Afritac by hosted Frameworks Forecasting Ebene. June 2019, 07 03 to from Maistry, Analyst-Supervision, Devi Mrs Lutchmee attended of Basel II/III in Emerging in the implementation by Economies hosted and Developing Market Ebene. 20 July 2018, to 16 South, from Afritac Analyst-Statistics, Massafeer, Anwar Mr Abdool attended South, Afritac by and Financial Inclusion hosted Ebene. 28 June 2019, to 17 from Analyst- Ramanah, Mrs Devi Shakuntala Supervision, attended ii. i. i. ii. • • • • • • • • • Training Training National Workshop on the State of Play of the of Play on the State National Workshop by hosted Negotiations Organisation Trade World Integration Regional Affairs, Ministry of Foreign November 15 to 14 from Trade, and International and Balaclava; 2018, Workshop Assessment Validation National Risk Bank and Ministry World of Financial by hosted 08 to 07 from Services and Good Governance, Flic en Flac. June 2019, Course on Financial Programming and Policies and Policies Programming on Financial Course Ebene; 2018, August 17 06 to from ATI, by hosted National Risk Assessment Validation Workshop Workshop Assessment Validation National Risk Bank and Ministry World of Financial by hosted 08 to 07 from Services and Good Governance, Flic en Flac. June 2019, Course on Legal Framework for Banking for Framework Legal on Course from ATI, Supervision by hosted and Resolution Ebene; and February 2019, 15 to 11 Course on Financial Development and Financial on Financial Development Course 28 to 17 South, from Afritac by Inclusion hosted Ebene. June 2019, Training on ‘Ánti-Money Laundering Enforcement’ Enforcement’ Laundering ‘Ánti-Money on Training Port 28 June 2019, to 24 MRA, by from hosted Louis. of Indicators on High Frequency Course 14 to 10 from ATI, by Economic Activity hosted Ebene; and 2018, September Mr Faraz Ibne Beekun, Analyst-IT, attended the attended Analyst-IT, Ibne Beekun, Mr Faraz Cybersecurityon Capacity SADC Workshop Building Cybersecurity Regional SADC and Drill on Financial National Computer Surveillance by Sector hosted Ebene. 2018, September 13 to 10 from Board, Mrs Mahima Bhurtha, Analyst-Economic attended Analysis & Research, Mr Feisal Bin Khalid Sooklall, Senior Analyst- Bin Khalid Mr Feisal attended Economic Analysis & Research, Mrs Sajadah-Aujayeb, Nivedita Senior Analyst- Legal Services, attended Mrs Kaveeta Nowbutsing-Hurynag,Mrs Kaveeta Senior Relations and Analyst-International the attended Communications, and Online Monitoring on the SADC Workshop Ministry by hosted of Foreign System Evaluation Trade, and International Integration Regional Affairs, Bornes. Quatre 2018, October 04 02 to from Analyst- Senior Pitteea, Mr Karankumar attended & Research, Economic Analysis ii. iii. i. ii. i. ii. ii. i. • • • • • • Local Courses/Seminars/Workshops attended by by attended Local Courses/Seminars/Workshops Officer Analysts and Facilities Good Governance together with FIU with with FIU together Good Governance on Bank, World from assistance technical Plaine Magnien. 2018, November 13 Financial on Forensic Programme Training Financial Services by hosted Investigation Ebene; July 2018, 13 to 04 Commission, from SupervisionBased Risk on for Workshop Supervisors Securities and Insurance/Pensions Financial Services by Commission, from hosted Plaine Magnien; and 2018, 22 November to 19 AML/CFT Supervision to Approaches based Risk Ministry by hosted of Financial Services and with Financial in collaboration Good Governance 2019, April 26 to 22 Services from Commission, Ebene. Ministry by hosted Programme Meridian Training 27 from of Finance and Economic Development, Port Louis; and 2018, 05 September to August from ATI, by on Monetary hosted Course Policy Ebene. 2019, 03 May 22 April to of Balance of Payments on Compilation Course September 21 to 10 from ATI, by Statistics hosted Ebene; 2018, on Model-Based Monetary Course Policy Afritac by hosted Forecasting and Analysis Ebene; 2018, November 16 05 to South, from and on Economic Issues in Regional Course June 14 03 to from ATI, by hosted Integration Ebene. 2019, the Length of for Demand Seminar on “Tourism in Mauritius: Socio-Economic StatusStay and Mauritius by hosted Development” Psychological Ebene; July 2018, Council, on 19 Research by Launch hosted Project Mauritian Diaspora Balaclava; 2018, 29 November Mauritius, on IOM and Miss Anne Cecile Baptiste, Bank Officer Grade Grade Bank Officer Cecile Baptiste, Miss Anne the attended & Research, I-Economic Analysis and Policies on Financial Programming Course Ebene. 2018, August 17 06 to from ATI, by hosted Bhurtun, Bank Officer Grade Mr Yaasir I-Supervision, attended Bank Officer Grade Miss Geeleena Bissessur, attended Operations, I-Financial Markets Officer Grade Miss Rideema Cunniah, Bank attended I-Economic Analysis & Research, Miss Urvashee Dussooa, Bank Officer Grade I-Statistics, attended i. ii. iii. i. ii. i. ii. iii. i. ii. • • • • • Seminar Course on Course Roundtable Roundtable Seminar on Training on Geospatial Data for for Data on Geospatial Training National Risk Assessment Validation Validation Assessment Risk National Seminar on Impact of Basel III reforms of Basel III reforms Seminar on Impact the the Workshop on Payroll Accounting: Best Practices Best Practices Accounting: Payroll on Workshop National Risk Assessment Refresher Workshop Workshop Assessment Refresher National Risk Ministry by hosted of Financial Services and National Capacity Building Workshop on National Capacity Building Workshop for the Financing of Terrorism Countering Ministry by Financial Mauritius hosted of 31 29 to from , Servicesand Good Governance Flic en Flac; and 2018, October on Blockchain hosted by Financial ServicesFinancial by hosted Blockchain on Ebene. 2019, Commission, on 20 May I-Economic Mr Atish Babboo, Bank Officer Grade the attended Analysis & Research, Management in Resource-Rich Macroeconomic 03 August 23 July to from ATI, by Countries hosted Ebene. 2018, Parveen Bank Officer Mrs Bakarkhan, Rafika I-Accounting Grade attended Budgeting, and the on 28 February 2019, ProNumeris, by hosted Bagatelle. Banarsee, Officer Bank Preeyamvada Miss I-Legal Services,Grade attended in the implementation of Basel II/III in Emerging of Basel II/III in Emerging in the implementation by hosted Economies and Developing Market Ebene. 20 July 2018, to 16 from South, Afritac Miss Martine Martine Bank Officer Acham, I-Supervision,Grade the attended implementation in the of Basel III reforms Impact and Developing Market of Basel II/III in Emerging 20 to 16 South, from Afritac by Economies hosted Ebene. July 2018, Soon Chan Ah Kine, Bank Officer Mr Stephan I-Supervision,Grade the attended Infrastructure and Innovation hosted by National by hosted and Innovation Infrastructure 22 February2019, 20 to from Board, Computer Ebene. Mr Uttam Analyst-Supervision, Deepak Seetul, attended of African Development Bank in collaboration Bank in collaboration of African Development African by hosted Africa Fund with the Mauritius Port Louis. 2019, Bank, on 06 March Development Rashpassing, BI Analyst- Mr Roopeswarchanda the attended IT, Workshop hosted by World Bank and Ministry Bank World of by hosted Workshop 07 from ServicesFinancial and Good Governance, en Flac. Flic 2019, 08 June to Analyst-Risk Ramudit-Bakhoree, Mrs Preethee the attended Control, & Product Miss Yogeeta Devi Ramphul, Analyst-Supervision, Devi Miss Yogeeta attended ii. i. • • • • • • • • • Local Courses/Seminars/Workshops attended by by attended Local Courses/Seminars/Workshops I Bank Officers Grade

Appendices 204 Appendices 205 the Training Training Workshop Workshop Risk based based Risk the Workshop on Risk Risk on Workshop Course on Financial Course Seminar on Impact of Seminar on Impact Course on Compilation on Compilation Course Miss Preksha Kurrumchand, Bank Officer Grade Officer Grade Bank Kurrumchand, Miss Preksha I-Supervision, the attended Based SupervisionInsurance/ Securities and for Services Financial Supervisors by Pensions hosted Plaine 2018, 22 November to 19 from Commission, Magnien. Mrs Bank Officer Mehisha Luchmadu-Imrit, I-Supervision,Grade the attended Based Supervisionon Risk and Securities for Supervisorsby hosted Insurance/Pensions 22 to Financial Services 19 Commission, from Plaine Magnien. 2018, November Bank Officer Lallbeeharry, Mr Muhammad Maahi I-Supervision, Grade attended Miss Bihisht Mautadin, Bank Officer Grade the attended I-Economic Analysis & Research, ATI, by hosted Debt Statistics Workshop External Ebene. 2018, August 17 to 13 from Mohesh, Bank Officer Grade Yashni Miss Pooja I-Supervision, the attended of Basel II/ in the implementation Basel III reforms Economies and Developing Market III in Emerging 20 July 2018, to 16 South, from Afritac by hosted Ebene. Bank Officer Mr Balaganapathi Mootoo, I-Supervision,Grade the attended SupervisionAML/CFT to hosted Approaches Ministryby of Financial Services and Good Services with Financial in collaboration Governance Ebene. 26 April 2019, 22 to Commission, from Bank Officer Grade Mootoosamy, Miss Koveena I-Supervision, the attended to 25 March from ATI, Surveillance by Sector hosted Ebene. 05 April 2019, Mahomed Mussa, Bank Officer Grade Mr Faizal I-Statistics, the attended ATI, by Statistics hosted of Balance of Payments Ebene. 2018, September 21 to 10 from Officer Bank MrsPurmessur-Dookhit, Ouma attended I-Economic Analysis & Research, Grade in Management Macroeconomic on Course the 23 from ATI, by hosted Countries Resource-Rich Ebene. 2018, August 03 July to Bank Officer Grade Ramburun, Mrs Amrita Devi I-Accounting attended Budgeting, and Best Practices Accounting: on Payroll Workshop on 28 February 2019, ProNumeris, by hosted Bagatelle. Programme on Forensic Financial Investigation Investigation Financial on Forensic Programme Ebene. July 2018, 13 to 04 FSC, from by hosted • • • • • • • • • • the Risk Risk Course on Course Risk based based Risk the Course on Course the Second Regional Workshop on Financial Access on Financial Access Workshop Second Regional 04 from South, Afritac by hosted Collection Data Ebene. 2019, March 07 to Seminar on Mainstream National Accounts and National Accounts Seminar on Mainstream Afritac by Statistics hosted Payments Balance of Ebene; December 2018, 07 03 to South, from and Course on Model-Based Monetary Course Policy Afritac by hosted Forecasting and Analysis Ebene. 2018, November 16 05 to South, from Course on Economic Issues in Regional in Regional Economic Issues on Course June 14 03 to from ATI, by hosted Integration Ebene. 2019, Theory and Administration: Policy on Tax Course July 27 to 16 from ATI, by hosted and Practice Ebene; and 2018, Miss Sidhi Devi Kawal, Bank Officer Grade Grade Officer Bank Kawal, Devi Sidhi Miss the I-Financial Stability, attended from ATI, Surveillance by hosted Financial Sector Ebene. 05 April 2019, to 25 March Workshop on Liquidity Forecasting Frameworks Frameworks on Liquidity Forecasting Workshop June 2019, 07 03 to South, from Afritac by hosted Ebene. Miss Bibi Shaheen Banoo Hawseea, Bank I-Supervision,Officer Grade the attended Supervision AML/CFT to based Approaches Ministry by hosted of Financial Services and Good Services with Financial in collaboration Governance Ebene. 26 April 2019, 22 to Commission, from Bank Hurreeram, Sharma Mr Vachaspati Relations and I-International Officer Grade attended Communications, by hosted Integration Economic issues in Regional Ebene. June 2019, 14 03 June to from ATI, Bank Officer Grade Jugessur, Miss Heeranee I-Statistics, attended Miss Yeshni Goburdhun, Bank Officer Grade Bank Officer Grade Goburdhun, Miss Yeshni I-Supervision,the attended Supervision AML/CFT to hosted Approaches Ministryby of Financial Services and Good with Financial Services in collaboration Governance Ebene. 26 April 2019, 22 to Commission, from Mrs Bank Officer Grade Gungah, Vimlawtee I-Accounting attended Budgeting, and Mrs Jazbeen Banu Edoo, Bank Officer Grade Mrs Grade Officer Bank Edoo, Jazbeen Banu the attended & Research, I- Economic Analysis by Diagnostics hosted on Macroeconomic Course Ebene. July 2018, 13 02 to from ATI, Bank Officer Grade Gariban, Miss Bibi Sharmeen attended & Research, I- Economic Analysis ii. i. ii. iii. i. • • • • • • • • National Capacity Building Workshop on CapacityNational Workshop Building Mr Sheik Muhammad Hafeez Toofail, Bank Toofail, Hafeez Muhammad Mr Sheik services, I-Legal Grade Officer attended the Mauritius for Financing of Terrorism the Countering Ministry by hosted Services of Financial and Good Flic en 2018, October 31 to 29 from Governance, Flac. • Seminar on Blockchain hosted by by hosted Seminar on Blockchain the Course on Fiscal Framework hosted by ATI, from from ATI, by hosted Framework Fiscal on Course Ebene; 2018, 05 October to September 24 on Financial Access Workshop Second Regional 04 from South, Afritac by hosted Collection Data Ebene; and 2019, March 07 to Frameworks on Liquidity Forecasting Workshop June 07 03 to South, from Afritac by hosted Ebene. 2019, Mr Chidanand Rughoobar, Bank Officer Grade Officer Grade Bank Rughoobar, Mr Chidanand the attended Analysis & Research, I-Economic of Economic Indicators Frequency on High Course September 14 to 10 from ATI, by Activity hosted Ebene. 2018, Bank Seedoyal, NainamMiss Priyadarshinee and MCIB, System I-Payments Officer Grade attended Financial Services 2019, May Commission, on 20 Ebene. Grade Bank Officer Tengur, Miss Rajlukshmee attended & Research, I-Economic Analysis i. ii. iii. • • •

Appendices 206 Appendices 207 Abbey Royal Finance Ltd Royal Abbey EFK Ltd Eagle Ltd Iron Co. Ltd Moneytime Unit E Co Ltd Ltd Vish Exchange Co. Ltd British American Exchange Ltd Change Express Ltd Cim Forex Co Ltd Exchange Foreign Mauritius Post Shibani Finance Co. Ltd Company Thomas Cook (Mauritius) Operations Limited

Money-Changers de Change) (Bureaux 1. 2. 3. 4. 5. 6. Dealers Exchange Foreign 1. 2. 3. 4. 5. 6. 1

2 Finlease Company Limited Finlease Company Leasing Finance Co. Ltd La Prudence Limited Mauritian Eagle Leasing Company Ltd Mauritius Housing Company SICOM Financial Services Ltd SPICE Finance Ltd The Mauritius Civil Service Mutual Aid Association Ltd Cim Finance Ltd HSBC Bank (Mauritius) Limited HSBC Bank (Mauritius) Limited (Mauritius) Limited Bank Investec MauBank Ltd SBI (Mauritius) Ltd SBM Bank (Mauritius) Ltd Bank (Mauritius) Limited Standard Bank (Mauritius) Limited Chartered Standard and Shanghai Banking Corporation The Hongkong Limited Bank Limited The Mauritius Commercial Bank Ltd Private Warwyck Habib Bank Limited AfrAsia Bank Limited Bank One Limited Bank of Baroda Bank of China (Mauritius) Limited Limited Bank BanyanTree Bank Mauritius Limited Barclays BCP Bank (Mauritius) Ltd Century Ltd Banking Corporation ABC Banking Corporation Ltd ABC Banking Corporation

The bank carries on exclusively Islamic banking business. on exclusively The bank carries banking business. private on exclusively The bank carries 2. 3. 4. 5. 6. 7. 8. 1. Non-Bank Deposit Taking Institutions Non-Bank Deposit Taking 1 2 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 10. 2. 3. 4. 5. 6. 7. 8. 9. 1. Banks The following is an official list of banks holding a Banking Licence, institutions other than banks which are licensed are other than banks which is an official list institutions of banks holding a Banking Licence, The following of money-changer the business or foreign transact licensed to dealers business and cash deposit taking transact to 2019. as at 30 June dealer in Mauritius and Rodrigues exchange Appendix VI Appendix AND MONEY-CHANGERS INSTITUTIONS, TAKING DEPOSIT BANKS, NON-BANK OF LIST OF MAURITIUS THE BANK BY DEALERS LICENSED EXCHANGE FOREIGN Contribution to GDP Growth by Demand Component by Growth GDP to Contribution Investment Private of Public and Rates Growth Balance Account Current and Rate Balance, Saving Resource cent Per in GVA, Secondary Sectors of Primary, and Tertiary Share Sector by GDP Growth Contribution to Cane and Sugar Production and Exports Fish Production Sector Distribution of the Manufacturing and Percentage Rate Growth Real Estate and Real in Construction Growth GVA Service and Food of Accommodation Activities and Growth Share Receipts and Tourism Arrivals Tourist of Financial Sector and Growth Share of ICT Sector and Growth Share and Unemployment Change in Employment Rate, Unemployment and June 2019 June 2018 the Change in CPI between Divisions to Contribution by Average) Inflation (12-Month Headline and Core Inflation (Y-o-y) CPI and Core of BML, Rs million and Sources Components Rs million 2019, and June 2018 October in Bank Loans Between Increase Contribution to Cash Ratio Rupee Cash Holdings and Average Excess Rupee Account of the Current Components Account Financing of the Current Reserves and Import Official International Cover Gross in FY2018-19 Revenue Total of Government’s Sources in FY2018-19 Expenditure Total of Government’s Components Rate Nominal Exchange and REER MERI2 of MERI1, Evolution Currency by Turnover Dealers: Exchange Banks and Foreign by Transactions Exchange Foreign SEMDEX and SEM-10 of the Evolution Sector the Private to of Credit Growth Year-on-year Rates Household Debt Service Cost and Interest Gap Household Credit-to-GDP Gap Credit-to-GDP Corporate and Confidence Indices Leading Indicators Composite Dollar Index Banks of Major Central Rates Main Policy of Banks Assets Households and Other Sectors Other Non-financial Corporations, Bank Loans to of Income of Banks Components of Expense of Banks Components and Equity Assets of Banks on Average Return List Charts of Chart 2.1 Chart 2.2 Chart 2.3 Chart 2.4 Chart 2.5 Chart 2.6 Chart 2.7 Chart 2.8 Chart 2.9 Chart 2.10 Chart 2.11 Chart 2.12 Chart 2.13 Chart 2.14 Chart 2.15 Chart 2.16 Chart 2.17 Chart 2.18 Chart 2.19 Chart 2.20 Chart 2.21 Chart 2.22 Chart 2.23 Chart 2.24 Chart 2.25 Chart 2.26 Chart 2.27 Chart 2.28 Chart 2.29 Chart 2.30 Chart 2.31 Chart 2.32 Chart 2.33 Chart 2.34 Chart 2.35 Chart 2.36 Chart 3.1 Chart 3.2 Chart 3.3 Chart 3.4 Chart 3.5

Appendices 208 Appendices 209 Interest Rate Spread of Banks Spread Rate Interest of NBDTIs Structure Balance Sheet of NBDTIs Profitability and Equity Assets of NBDTIs on Average Return Reserves Excess Banks’ Rupee Reserves Banks of Excess of Rupee Main Drivers Rates Liquidity Market and Money Excess Bills of Mauritius Treasury of Government Auctioning Participants in the MCIB Number of Current on the MCIB Number of Reports Drawn Facilities Credit as at 30 June 2019 in Circulation Banknotes List Charts of Chart 3.6 Chart 3.7 Chart 3.8 Chart 3.9 Chart 4.1 Chart 4.2 Chart 4.3 Chart 4.4 Chart 5.1 Chart 5.2 Chart 5.3 Chart 5.4 Monetary Ratios Countries Source 10 Top Remittances, Workers’ Inward 5 Destination Countries Top Remittances, Workers’ Outward Ratio Adequacy Capital Risk-Weighted Assets of On-Balance Sheet Weights Risk of Banks’ Assets Weights Combined Risk Banks of Income Statements Consolidated Account of NBDTIs and Loss Profit Consolidated (Banks and NBDTIs) Financial Stability of Deposit Takers Indicators the Bank by Intervention Exchange Foreign Transactions Currency Foreign Major Currencies Sales by and Purchases Currency Foreign of Mauritius Securities of Government Auctions Notes of Mauritius Treasury Government of Three-Year Auction Reverse of Mauritius Bonds Government of Five-Year Auction Reverse Counterparty by Transactions Secondary Market 2019 as at end-June in Circulation Banknotes of Polymer and Volume Value List Tables of 2.1 2.2 2.3 3.1 3.2 3.3 3.4 3.5 3.6 4.1 4.2 4.3 4.4 4.5 4.6 4.7 5.1

Appendices 210 Appendices 211 Association of African CentralAssociation Banks African Monetary Cooperation Programme Terrorism Laundering/Combating the Financing of Anti-Money Machine Teller Automated Bulk Clearing System on Banking SupervisionBasel Committee Liabilities Money Broad Bank of England of Central Governors Bank Committee Central Depository System Cost, insurance,freight Contribution Network Project Eastern for and Southern Common Market Africa Consumer Price Index Depository Corporations Domestic Important Systemically Banks Central Bank European Economies and Developing Emerging Market Organisation and Agriculture Food Financial Access Survey Organisation International Consumer Protection Financial on board Free Financial Stability Board Financial Services Commission Financial Soundness Indicators Financial Year Global Business Company Global Business Licence Holders Domestic Product Gross Domestic Savings Gross Formation Capital Fixed Gross Bill of Mauritius Treasury Government Income National Disposable Gross National Income Gross National Savings Gross Reserve Official International Gross Surplus Operating Gross Added Value Gross Technology and Communication Information Islamic Financial Services Board Council Grains International Islamic Liquidity Management International MonetaryInternational Fund of Securities Commissions Organisation International Technology Information Rate Repo Key List Acronyms of AACB AMCP AML/CFT ATM BCS BCBS BML BoE CCBG CDS c.i.f CNP COMESA CPI DCs D-SIB ECB EMDEs FAO FAS FinCoNet f.o.b FSB FSC FSI FY GBC GBLH GDP GDS GFCF GMTB GNDI GNI GNS GOIR GOS GVA ICT IFSB IGC IILM IMF IOSCO IT KRR List of Acronyms

LCR Liquidity Coverage Ratio LTV Loan to Value MACSS Mauritius Automated Clearing and Settlement System MCIB Mauritius Credit Information Bureau MERI Mauritius Exchange Rate Index MPC Monetary Policy Committee MRA Mauritius Revenue Authority MSCI Morgan Stanley Capital International NBDTI Non-Bank Deposit-Taking Institutions NFA Net Foreign Assets NPL Non-Performing Loans NPS National Payment Switch NYMEX New York Mercantile Exchange ODCs Other Depository Corporations OECD Organisation for Economic Co-operation and Development ONFCs Other Non-Financial Corporations OPEC Organization of the Petroleum Exporting Countries PLACH Port-Louis Automated Clearing House PLR Prime Lending Rate PPI-A Producer Price Inflation-Agriculture PPI-M Producer Price Inflation-Manufacturing RCG Regional Consultative Group REER Real Effective Exchange Rate REPSS Regional Payment and Settlement System RISDP Regional Indicative Strategic Development Plan ROA Return on Assets ROE Return on Equity RTGS Real Time Gross Settlement SADC Southern African Development Community SDGs Sustainable Development Goals SDR Savings Deposit Rate SEM Stock Exchange of Mauritius SEMDEX Stock Exchange of Mauritius Index SIRESS SADC Integrated Regional Settlement System SME Small and Medium Enterprises SWIFT Society for Worldwide Interbank Financial Telecommunication US Fed US Federal Reserve VIX Volatility Index WRI Wage Rate Index WTI West Texas Intermediate y-o-y year-on-year

The coins illustrated in the Report are on display in the Bank of Mauritius Museum.

Unless otherwise stated, the Report relies on information and financial data available up to the end of June 2019.

Paper used is issued from sustainably managed forests and controlled sources PEFC Certified BANK OF MAURITIUS Sir William Newton Street, Port Louis, Mauritius Email: [email protected] www.bom.mu ISSN 1694-3457