During the Monetary Policy Advisory Council meeting held on 27 May the central intervention rate was left unchanged at 3%.
The press release issued following the meeting stated that the Governor of the Central Bank of Malta considered that no developments had arisen since the previous meeting that would justify a change in the Bank’s monetary policy stance. At its current level, therefore, the central intervention rate provided adequate support to the exchange rate peg. Both the Bank’s external reserves and domestic financial markets were characterised by stability, as evidenced, in the latter case, by the positive investor response to the issue of long-term Government stocks.
Similarly, as regards the domestic economy, there were no major departures from prevailing trends, particularly in money and credit and in the labour market. There was, however, some indication of a bottoming out of the decline in tourism and in manufactured exports. At this stage of the economic cycle, and with international energy costs rising, the Governor stressed the importance of ensuring that competitive markets effectively contained domestically-generated pressures on prices.
The Monetary Policy Advisory Council is due to meet again on 2 July 2004.