{
  "title": "Modernizing Monetary Policy in Mauritius: Implementation, Analytics, and Communication at the Bank of Mauritius",
  "publication": "Selected Issues Papers, August 7, 2026",
  "sourceUrl": "https://www.imf.org/en/publications/selected-issues-papers/issues/2026/08/05/modernizing-monetary-policy-in-mauritius-implementation-analytics-and-communication-at-the-578589",
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  "summary": "Since the adoption of an explicit inflation-targeting regime in 2023, Mauritius has made notable progress in modernizing its monetary policy framework.",
  "sections": [
    {
      "heading": "Executive summary and key findings",
      "content": "- Since the adoption of an explicit inflation-targeting regime in 2023, Mauritius has made notable progress in modernizing its monetary policy framework.\n- Reforms have:\n  - strengthened the design of monetary policy implementation;\n  - enhanced analytical capacity through a modern Forecasting and Policy Analysis System (FPAS);\n  - improved central bank communication.\n- Remaining constraints include incomplete implementation of the operational framework—particularly persistent excess liquidity that generates deviations between the announced policy rate and the effective stance—which has constrained monetary transmission.\n- Forward-looking analytical insights need to be enhanced in external communication to better anchor expectations.\n- Stronger alignment between implementation, analytics, and communication would:\n  - enhance policy effectiveness;\n  - further anchor inflation expectations;\n  - reinforce the credibility of monetary policy in Mauritius."
    },
    {
      "heading": "Implementation: operational framework and monetary transmission",
      "content": "- Progress:\n  - Design of monetary policy implementation has been strengthened since the 2023 adoption of inflation targeting.\n- Constraint:\n  - Persistent excess liquidity remains a feature of the operational framework.\n  - Excess liquidity generates deviations between the announced policy rate and the effective stance.\n  - These deviations have constrained the monetary transmission mechanism."
    },
    {
      "heading": "Analytics: Forecasting and Policy Analysis System (FPAS) and modeling",
      "content": "- Progress:\n  - Analytical capacity has been enhanced through a modern FPAS.\n- Gap:\n  - Forward-looking analytical insights from the FPAS need to be more visibly incorporated into external communication."
    },
    {
      "heading": "Communication: clarity, forward guidance, and credibility",
      "content": "- Progress:\n  - Central bank communication has improved since 2023.\n- Gap:\n  - External communication should place greater emphasis on forward-looking analytical insights to better anchor inflation expectations and reinforce credibility."
    },
    {
      "heading": "Policy implications and recommendations",
      "content": "- Align implementation, analytics, and communication to:\n  - reduce deviations between the announced policy rate and the effective stance;\n  - strengthen monetary transmission;\n  - improve the anchoring of inflation expectations;\n  - reinforce central bank credibility.\n- Operational focus:\n  - Address persistent excess liquidity as a priority to ensure the announced policy rate reflects the effective monetary stance.\n- Analytical and communication focus:\n  - Enhance the use of FPAS outputs in external communications, with clearer forward-looking guidance drawn from analytical work.\n\n---\n\n Content in this bundle\n\n- Sipea2026080\n  - Sipea2026080 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Sipea2026080 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/selected-issues-papers/issues/2026/08/05/modernizing-monetary-policy-in-mauritius-implementation-analytics-and-communication-at-the-578589"
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    "Authors: Leandro Medina, Valeriu Nalban",
    "Published: August 7, 2026",
    "Series: Selected Issues Papers",
    "DOI: https://doi.org/10.5089/9798229055741.018",
    "Since the adoption of an explicit inflation-targeting regime in 2023, Mauritius has made notable progress in modernizing its monetary policy framework.",
    "Reforms have:",
    "Remaining constraints include incomplete implementation of the operational framework—particularly persistent excess liquidity that generates deviations between the announced policy rate and the effective stance—which has constrained monetary transmission.",
    "Forward-looking analytical insights need to be enhanced in external communication to better anchor expectations.",
    "Stronger alignment between implementation, analytics, and communication would:",
    "Progress:",
    "Constraint:",
    "Progress:",
    "Gap:",
    "Progress:",
    "Gap:",
    "Align implementation, analytics, and communication to:",
    "Operational focus:",
    "Analytical and communication focus:",
    "**Sipea2026080**"
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