Identifier
Created
Classification
Origin
06ANTANANARIVO1333
2006-11-29 09:55:00
UNCLASSIFIED
Embassy Antananarivo
Cable title:  

Central Bank Issues Monetary Policy Statement

Tags:  EFIN ECON PGOV MA 
pdf how-to read a cable
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DE RUEHAN #1333 3330955
ZNR UUUUU ZZH
O 290955Z NOV 06
FM AMEMBASSY ANTANANARIVO
TO RUEHC/SECSTATE WASHDC IMMEDIATE 3929
INFO RUEHFR/AMEMBASSY PARIS 0742
RUEATRS/DEPT OF TREASURY WASHDC
RUEHLMC/MILLENNIUM CHALLENGE CORP
UNCLAS ANTANANARIVO 001333 

SIPDIS

SIPDIS

DEPT FOR AF/E
PARIS FOR D'ELIA
TREASURY FOR FBOYE AND KTORP

E.O. 12958: N/A
TAGS: EFIN ECON PGOV MA
SUBJECT: Central Bank Issues Monetary Policy Statement

UNCLAS ANTANANARIVO 001333

SIPDIS

SIPDIS

DEPT FOR AF/E
PARIS FOR D'ELIA
TREASURY FOR FBOYE AND KTORP

E.O. 12958: N/A
TAGS: EFIN ECON PGOV MA
SUBJECT: Central Bank Issues Monetary Policy Statement


1. The Central Bank ran a short public announcement in several
newspapers November 25 outlining monetary policy for the third
quarter of 2006 (informal translation in para 3). According to
International Monetary Fund (IMF) Resident Representative Pierre van
den Boogaerde, the Central Bank's press statement is its first
effort to explain or defend policy to the Malagasy people. Although
the simple release contains little information, and would be lost on
all but a tiny minority of elite Malagasy, the ResRep commended the
Central Bank's transparency.


2. Post gives much credit to the U.S. Treasury Department's
Technical Assistance missions, in particular the week Mr. Peter
Nicholl spent with Central Bank Director General Rasolomanana in May

2006. In subsequent meetings with Central Bank contacts, Post has
learned that Mr. Nicholl's suggestions on governance, transparency,
and credibility have been carefully considered. EmbOffs will
continue to follow the Central Bank's gradual reforms, building on
the foundation and access supported by U.S. Treasury engagement.


3. Begin Text

Communication of the Central Bank Relative to Monetary Policy

As was expected for August, the annualized inflation rate
decelerated during the third quarter to currently be 10 percent, due
to:

-- the clear improvement of external balances which stabilized the
Ariary exchange rate,

-- decline in increases of petroleum,

-- good increases in domestic production.

Still, the slowing of inflation at the moment is less rapid, and
will stay so for the coming trimester, caused by the strength of
demand measured by the growth of monetary aggregates and
particularly credit.

Having considered recent economic data and developments that could
impact prices, the Madagascar Central Bank remains vigilant with
regard to inflation. The Bank thus decided to leave monetary
instruments at their current levels, including the "director rate"
(base rate) at 12 percent.

Antananarivo, November 24 2006

The Madagascar Central Bank

End Text

MCGEE