The Central Bank of Malta’s monetary policy advisory council yesterday left the central intervention rate unchanged at 4.25 per cent. The council is due to meet again on 29 November.

At yesterday’s meeting of the council, Governor Michael C. Bonello considered that conditions in domestic financial markets, particularly in the foreign exchange market, were characterized by continued stability and did not justify a change in the monetary policy stance.

The bank’s external reserves fell in October, but this was largely due to the reversal of temporary inflows recorded in September associated with the operations of companies engaged in international business, and the continued, though slower, conversion of Maltese liri into euro, the bank said. Short-term and long-term interest rate differentials in favour of the Maltese lira were broadly unchanged in an environment of ample liquidity, and appeared to be a factor behind the favourable response to the latest issue of government bonds on the primary market.

In its analysis of the latest data, the council observed evidence of sustained activity across a range of economic sectors. This was reflected in a further increase in private sector employment and in a stable, low level of unemployment. Meanwhile, the continued narrowing of the trade gap contributed to an improvement in the current account position, as did higher tourist expenditure. At the same time, the council noted that food prices had risen further, and reiterated the need to ensure that imported inflation was not reinforced by locally-generated price pressures.