The governor reaffirmed the thrust of the statement made at the end of the meeting of 2 July, in which he had highlighted the key factors that would influence the bank’s future monetary policy stance, and noted that there were no developments since then that would justify a change in the central intervention rate.

However, he stressed the need to strengthen support for the exchange rate peg by enhancing the economy’s capacity to generate export earnings, particularly by containing wage and other costs and achieving productivity gains.

The governor also drew attention to the recent rapid increase in bank lending to the personal sector, especially for housing finance, and called for a prudent approach by banks and borrowers alike to avoid unsustainable increases in the levels of such debt.

The Monetary Policy Advisory Council is due to meet again on 26 August.