At the meeting held on 29 April, the Central Bank of Malta left the central intervention rate unchanged at 3%.
In the press release following the meeting, the Governor of the Central Bank said that that since the previous meeting there were no developments that would justify a change in the monetary policy stance. The Bank’s external reserves remained broadly stable over March and April. Domestic financial market conditions were also quiet and were characterised by an unchanged short-term premium on the Maltese lira, although the long-term premium narrowed as bond yields abroad increased. Inflationary pressures moderated further in March, suggesting that demand conditions remained subdued.
Other available indicators, including those on output and credit growth, also suggest that the level of economic activity remains below potential. On balance, the Governor concluded that, at its current level, the central intervention rate provided adequate support to the exchange rate peg.
The Monetary Policy Advisory Council is due to meet again on 27 May 2004.