The governor considered that there had been no developments 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 levelling off 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.