With a view to providing an efficient service to the banking community, Government and parastatal bodies and the public, the Operations Department is organised in different units, namely, Operations, Currency, Public Debt Management, Banking, Clearing House and a Rodrigues Office.
Operations
Office
The Operations Office is responsible, among other
things, for the implementation of decisions regarding the management of foreign
exchange reserves and auctioning of Treasury Bills.
Sales and Purchases of Foreign Currencies
During the fiscal year 1999-00, the Bank of Mauritius sold a total amount of US$94.0 million, equivalent to Rs2,399.4 million, to commercial banks through intervention on the interbank foreign exchange market. The Bank also purchased US$15.7 million and EUR2.5 million, equivalent to Rs496.0 million, from commercial banks.
Release of Sugar Proceeds to the Banking
Sector
All sugar proceeds received
in foreign currencies were released directly to the banking sector.
Lending to Commercial Banks
Advances to Banks
Effective 15 December 1999, the Bank introduced a standing facility, known as the Lombard Facility, to provide overnight collateralised advances to commercial banks in the event of unexpected funding shortfalls. The Lombard Rate was initially set at 14.0 per cent per annum but, in view of the declining rate of inflation, was brought down to 13.0 per cent per annum on 22 March 2000 and further down to 11.5 per cent on 20 June 2000.
Treasury Bills
The Bank of Mauritius continued to
issue Government of Mauritius Treasury Bills with maturities of 30, 91, 182,
364 and 728 days. However, with effect from
5 November 1999, the Bank started the issue of 28-day Treasury Bills in lieu of
30-day Treasury Bills and with effect from 7 April 2000, the issue of Treasury
Bills of 28 days maturity was discontinued until further notice.
During the fiscal year 1999-00,
Government of Mauritius Treasury Bills for a total nominal amount of Rs56.3
billion were issued through weekly auctions.
Treasury Bills issued are tradable at the Secondary Market Cell (SMC) of
the Bank of Mauritius. During 1999-00,
Treasury Bills for a total nominal amount of Rs15.25 billion were transacted
through the SMC.
Cash Balance
and Other Liquid Assets
In accordance with section 22 of the Bank of Mauritius Act, all commercial banks are required to maintain cash balances, consisting of balances with the Bank of Mauritius and of notes and coins in their vaults, of not less than 5.5 per cent of their total deposit liabilities.
The minimum liquid assets ratio required to be maintained by commercial banks under section 17 of the Banking Act 1988 was maintained at zero per cent.
Abandoned
Funds
Under section 34 of the Banking Act
1988, commercial banks are required to transfer to the Bank of Mauritius
deposits or monies lodged with them for any purpose and that have remained with
them unclaimed for ten years or more.
These funds are refunded to the banks for repayment to owners of the
funds or their heirs or assigns on rightful claims being established to the
satisfaction of the Bank of Mauritius.
Repurchase
Transactions
The Bank started, with effect from 15 December 1999, to conduct through an auctioning process repurchase transactions, repos and reverse repos, with commercial banks as eligible counterparties and Government of Mauritius Treasury Bills as the underlying securities. A total amount of Rs4.8 billion was put on auction with repurchase period ranging from 1 to 7 days. The weighted average yield of bids accepted ranged from 6.25 per cent to 9.26 per cent.
Rediscounting Facilities
With a view to mitigating the adverse impact of the weakening of the euro on the EPZ sector, the Bank has provided, as from 3 March 2000, rediscount facilities to commercial banks with respect to EPZ export bills denominated in euro and euro zone currencies. The scheme remained effective until 30 June 2000. Initially set at 7.50 per cent, the rediscount rate applied by the Bank of Mauritius was reduced to 6.50 per cent on 22 March in the wake of the reduction of the Lombard Rate from 14 per cent to 13 per cent.
Currency Office
The Currency Office is
responsible for the safekeeping and management of the stock of local currency.
New Family of Banknotes in Circulation
A new family of banknotes in seven denominations, namely Rs25, Rs50, Rs100, Rs200, Rs500, Rs1,000 and Rs2,000, incorporating additional security features was issued as from 1 July 1999 to replace all existing banknotes prior to that date. The Rs1,000 banknote of this family of banknotes was issued as from 24 August 1999.
All banknotes issued by the Bank prior to 1 July 1999 ceased to be legal tender as from 1 October 1999, but they are exchangeable at the Bank of Mauritius.
Issue of Commemorative Coins to mark the
150th Anniversary of the Mauritius Chamber of Commerce and Industry
To mark the 150th Anniversary of the Mauritius Chamber of Commerce and Industry, the Bank issued as from 25 January 2000 gold commemorative coins of Rs1,000 denomination and silver commemorative coins of Rs10 denomination. The selling prices of the gold and silver coins in proof conditions in presentation cases are Rs6,750 and Rs650, respectively.
The coins are legal tender
in Mauritius for the respective values stated thereon.
Public
Debt Management Office
The Public Debt Management Office is responsible for the issue and redemption of Mauritius Development Loan Stocks and other securities.
Issue of
Stocks
During the fiscal year 1999-00, the following Government Stocks for a total amount of Rs1.0 billion were issued:
Title
of Stocks Amount (Rs)
1. 9.25% Mauritius Development Loan Stock 2006 (1.6.2006) 146,000,000
2. 9.50% Mauritius Development Loan Stock 2010 (1.6.2010) 165,500,000
3. 9.75% Mauritius Development Loan Stock 2015 (1.6.2015) 688,500,000
1,000,000,000
===========
Redemption of Stocks
During
the fiscal year 1999-00, Government Stocks for a total amount of Rs750,000,000
were redeemed as follows:
Title
of Stocks Amount(Rs)
1. Mauritius
Development Loan Variable
Interest rate (1/2% above Bank Rate) Stock
1999 (31.10.1999) 250,000,000
2. Mauritius
Development Loan Variable Interest
Rate (1 ½% above Bank Rate) Stock 1999
(15.12.1999) 100,000,000
3. 9 ¼% Mauritius
Development Loan Stock
2000 (1.4.2000) 100,000,000
4. 12.50% Mauritius
Development Loan Stock
2000 (30.4.2000) 300,000,000
---------------
750,000,000
=========
Redemption of Bonds
During
the fiscal year 1999-00, the following Bonds were redeemed:
(i)
Five-Year
(Tax-Free) Progressive Interest Rate Bank of Mauritius Bonds for a total amount
of Rs26,876,000
(ii)
Seven-Year
(Tax-Free) Variable Interest Rate Bank of Mauritius Bonds for a total amount of
Rs2,082,000
(iii)
4-Year
Independence Bonds for a total amount of Rs296,352,000
Over The Counter Sales of Government of
Mauritius Treasury Bills
Since 14 December 1998, three types of Government of Mauritius Treasury Bills, namely, 182-day, 364-day and 728-day, are sold over the counter to individuals and non-financial corporations.
Central
Depository and Settlement Co. Ltd
The Bank of Mauritius administers the daily settlement of funds in respect of transactions carried out on the Stock Exchange by participants in the Central Depository and Settlement System, that is, stockbrokers and custodian banks.
During
the fiscal year 1999-00, settlements for a total amount of Rs1,024 million were
effected.
Banking Office
The Bank of Mauritius operates
current accounts for Government, parastatal organisations, commercial banks,
international financial institutions and staff members of the Bank. It is also responsible for the sale of
industrial gold to manufacturers of jewellery and of Dodo Gold coins to the
public.
Sale of Gold
The Bank of Mauritius imports and sells gold of high quality, that is, 24 carats 999.9 assay in bar forms of 1,000 grams, 500 grams and 100 grams and in grain forms to industrialists and licensed jewellers.
The daily selling prices of
industrial gold are based on the international gold market prices.
Value Added Tax (VAT) at the rate of 10 per cent is
chargeable on the sale of industrial gold to industrialists and licensed
jewellers.
Dodo Gold Coins
Dodo Gold coins of 22 carats are issued by the Bank of Mauritius in four denominations, namely one ounce with a face value of Rs1,000, half an ounce with a face value of Rs500, quarter of an ounce with a face value of Rs250 and one-tenth of an ounce with a face value of Rs100. The coins are legal tender.
The Dodo Gold coins are on sale at the Bank of Mauritius and at commercial banks in Mauritius. They are also marketed overseas by the Royal Mint of the United Kingdom.
The daily selling prices of the coins are based on their gold content and on international gold market prices.
Rodrigues Office
The Bank’s office in Rodrigues,
which started operations on 5 March 1999, offers the usual banking services to
Government Departments and commercial banks operating in Rodrigues. The Office also conducts over the counter
sales of Government of Mauritius Treasury Bills.
Mauritius Automated Clearing and Settlement Project (MACSS)
The Bank of Mauritius is proceeding on course with the implementation of a modern Real Time Gross Settlement system (RTGS) project known as the Mauritius Automated and Clearing Settlement System (MACSS).
The RTGS, which is a credit push system, is designed primarily for the settlement of large value cheques and cater essentially for time-sensitive low value cheques. Low value cheques will continue to be processed through the Port Louis clearing house. However, settlement will be effected at the end of each session. The benefits of the new payment system are embedded in the project objectives and guidelines. These may be summarised as follows:
§
To
improve the quality of payment services to further reduce float, speed up
circulation of funds and increase efficiency of funds transmission, while
providing convenience and service to users;
§
To
provide appropriate tools to the Bank of Mauritius, Ministry of Finance and
participating commercial banks to facilitate enhanced cash management and avoid
cash and liquidity risk;
§
To
improve the attractiveness of Mauritius as a financial hub by providing
state-of-the-art payment services that conform to emerging international
standards in a manner that balances efficiency, cost and risk;
§
To
enhance Government interaction with the financial markets in order to improve market
efficiency and lower funding costs;
§
To
provide the Bank of Mauritius, commercial banks and commercial bank customers
with the capability to irrevocably and unconditionally transfer funds in
real-time and thus discharge time sensitive payment obligations on an intraday
basis;
§
To
provide commercial banks with a secure basis for optimising the use of their
available liquidity without exposing the banking system to interbank credit
risk;
§
To
provide the Ministry of Finance and the Bank of Mauritius with a set of tools
to facilitate rigorous cash management and ensure that excess funds in reserve
and settlement accounts are available for revenue earning purposes;
§
To
give the Bank of Mauritius the opportunity to enhance the integrity of the
nation's payment mechanism through the application of well defined risk
management policies covering credit, liquidity and systemic risk;
§
To
enable bank supervisors to have near real-time access to commercial banks
positions as measured by reserve account balances, interbank payment flows and
usage of Bank of Mauritius credit facilities;
§
To
create an improved basis for new banking services;
§
To
achieve a reliable, safe, and integrated payment, clearing and settlement to
meet the needs of a growing economy;
§
To
improve the tools for macroeconomic management and monitoring by the Bank of
Mauritius.
Pilot testing of the system
is expected by 7 November 2000, and the system will come into operation by 15
December 2000