The Bank of Mauritius (French: Banque de Maurice) is the central bank of the Republic of Mauritius. It was established in September 1967 as the central bank of Mauritius. It was modelled on the Bank of England and was, in effect, set up with the assistance of senior officers of the Bank of England.
Amongst its responsibilities is the issuance of the Mauritian currency, the Mauritian rupee.
History
In the 19th Century three separate commercial banks, now all defunct, operated under the Bank of Mauritius name.[citation needed]
The first Bank of Mauritius started operations in 1813 or so, but survived only until 1825.[citation needed]
The second Bank of Mauritius was a British overseas bank with two boards of directors, one in London and the other in Port Louis. It began operations in 1832 and favored the interests of the planter class. In 1838 traders established Mauritius Commercial Bank to give themselves an alternative source of credit as until its establishment the Bank of Mauritius had a monopoly on the island. The financial crisis of 1847 in London resulted in the collapse of the sugar market, and severe losses to both of Mauritius's banks. Bank of Mauritius ceased business in 1848, though the Mauritius Commercial Bank has survived to the present.[citation needed]
In addition to the above three banks, a bank by the name of the Colonial Bank of Mauritius, Bourbon, and Dependencies, operated between 1812 and 1813.[citation needed]
Board of Commissioners of Currency
Before the establishment of the Bank, the currency issue was managed by a Board of Commissioners of Currency. The duties of the Board were restricted to those of an issuing authority.
The setting up of the Bank of Mauritius marked the beginning of a new phase in the monetary history of Mauritius, with the monetary system moving forward from the stage of 'Sterling Exchange Standard', under which currency was issued in exchange for sterling at a fixed rate of exchange, to that of a 'managed currency' in which the discretionary role of the monetary authority becomes important.
Objectives of the Bank
The Bank of Mauritius Act 1966 (as amended) lays down the purposes of the Bank which are to 'safeguard the internal and external value of the currency of Mauritius and its internal convertibility' and to 'direct its policy towards achieving monetary conditions conducive to strengthening the economic activity and prosperity of Mauritius.'
The Bank has been set up as the authority which is responsible for the formulation and execution of monetary policy consistent with stable price conditions. It also has responsibility for safeguarding the stability and strengthening of the financial system of Mauritius.
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