1. Monetary Policy
  2. Monetary Policy Technical Committee

Terms of Reference of the Monetary Policy Technical Committee (MPTC)

Mandate

The MPTC is established by the Bank’s Board of Directors with the responsibility to:

  1. consider matters pertaining to the formulation and implementation of monetary policy,
  2. advise on the operational aspect,
  3. recommend policy proposals for the Board’s consideration, consistent with the Bank’s objectives, and
  4. decide on parameters relating to the implementation of monetary policy.

The MPTC shall report on its activities to the Board of Directors at least on a quarterly basis.

Composition

The Chairperson shall be the First Deputy Governor and other representatives of the Committee shall be the Second Deputy Governor and the Head or a designated representative from the following Divisions:

  • Banking Services Division (BSD)
  • Financial Inclusion and Market Conduct Division(FIMCD)
  • Financial Market Division(FMD)
  • Financial Surveillance Division(FSD)
  • Research and Statistics Division(RSD)

FMD shall act as Secretariat to the MPTC

Functions

The primary functions of the MPTC shall be to:

  • provide a forum for the exchange of information on, and analysis of,
    • overall macroeconomic developments in the country and abroad;
    • current developments in key financial indicators.
  • provide a forum for the consideration of research and analysis that are relevant to the formulation and implementation of monetary policy before submission to the Board.
  • evaluate developments and trends in overall liquidity of the financial system.
  • approve the use of instruments under the control of the Bank in line with decisions adopted by the Board pertaining to the implementation of monetary policy.

The decisions will be guided by the analysis and policy recommendations of FMD and RSD as well as any other proposal brought forth by an MPTC member.

Meetings

As the Secretariat of the committee, FMD is responsible for setting up the meetings, subject to the approval of the Chairperson. Any other member may also request to have a non-scheduled MPTC meeting if approved by the Chairperson

The MPTC shall have a main meeting at least once a month to coincide with the start of a new Minimum Reserve Requirement (MRR) maintenance period. In the event that the main monthly meeting cannot be conducted on the planned date the meeting should be rescheduled within the next 48 hours.

Minutes of all MPTC meetings, which record all formal decisions, and the views of all members shall be taken and forwarded via email to all members within 10 working days following the meeting.

If the First Deputy Governor is not present or acting as Chief Executive Officer of the Bank, as prescribed by the CBS Act 2004, as amended, the Second Deputy Governor shall chair the meeting.

In the event that the Second Deputy Governor is unable to chair the meeting, a designated Head of Division, in the order listed below, shall act as Chairperson.

  1. Research and Statistics Division (RSD)
  2. Financial Surveillance Division (FSD)
  3. Banking Services Division (BSD)
  4. Financial Inclusion and Market Conduct Division (FIMCD)

Under all circumstances, the Head of FMD shall not be nominated as Chairperson of the Committee.

Decision Making
Deliberations

During a sitting of the Committee, a quorum of majority of members in office1 shall be required. Each member shall express his/her views based on the submitted information or proposal, as the case may be. Decisions shall be reached by majority vote.

A quorum shall also be required where in place of a meeting, members’ views are sought via email. Similarly, decisions shall be reached by majority vote.

The Committee shall consider each view in turn, and the view preferred by a majority of the members shall prevail and be adopted as the decision of the Committee.

In the event of an equality of votes, the Chairperson shall have a casting vote in addition to his/her deliberative vote. Where the Chairperson takes a decision in accordance with this provision, he/she shall as soon as possible inform the Board of Directors of the exercise of his/her authority under that section and his/her reasons for doing so.

Governor’s approval

The decisions of MPTC shall be communicated to the Governor, for his/her views.

All policy recommendations that are to be submitted to the Board for approval, shall be supported by the Governor.

1Members in office include all members who are on duty or not on leave.