Excess Liquidity

Comments on an Article that claims that it is only now that the Bank of Mauritius is concerned about low interest rate, unproductive investment and savings.

I cannot understand the fuss about the interest rate ; the connect between the Key Repo Rate (KRR) and the interbank rates and other money market rates was inexistent. it did not make any difference to existing liquidity conditions if the KRR was raised or reduced because of the persistent prevalence of excess liquidity in the money market.

Estimated Consolidated Budget Deficit in 2016-17 is 4.3% of GDP

The budget deficit for 2016-17 is estimated at 3.3% of GDP.  The IMF has argued, on several occasions, as in its 2011 Staff Report on Mauritius, that the deficit concept used by Government is “not comprehensive, because it excludes spending by special earmarked funds”.  In its 2014 Staff Report, the IMF again recommended “including all extra budgetary funds in the budget to increase fiscal transparency and better measure the fiscal stance”.