From India Times
The Mauritius finance ministry said excess liquidity in the Indian Ocean island’s banking system had reached levels where it would have to step in to help the central bank mop it up by front-loading government borrowing.
Increasing the key repo rate would only serve to further increase liquidity, the Ministry of Finance and Economic Development said in a statement.
“The Ministry of Finance is indeed concerned that the problem of excess liquidity in the banking system has deteriorated to the extent that it renders less effective the monetary transmission mechanism,” it said.
