Publicité Not respecting the schedules of rate-setting meetings is a deviation from international best practices. After two unexplained postponements, the Monetary Policy Committee (MPC) is due to meet today to decide on the Key Repo Rate (KRR). Had the Bank of Mauritius (BoM) postponed the meeting again, this would have changed nothing in the conduct, or rather the lack thereof, of its monetary policy. Today, the balance sheet of the BoM is in a mess, which severely impacts its ability to transmit its policy via the interest rate channel. People are unaware that monetary policy is closely intertwined with the central bank’s balance sheet. Suppose the MPC jacks up the KRR because it wants to see the market interest rates increase. Then the yields of 3-month Treasury bills must be brought closer to the KRR, and for that to happen, the BoM needs to issue more monetary policy instruments to mop up excess liquidity. Otherwise, the theoretical rise in the policy rate will remain without effect and depend solely on moral suasion.