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Monetary Policy

Monetary Policy refers to those actions and decisions undertaken by the Bank to create appropriate conditions that are in line with the economic objectives of the country.  In conducting monetary policy, the Bank keeps a close watch on economic developments with a view to maintaining a low and stable rate of inflation, an orderly foreign exchange market and an adequate level of foreign exchange reserves.  It then utilises a range of monetary policy tools to influence the level of liquidity in the banking system which indirectly influences the level of interest rates and, ultimately, the overall demand for goods and services in the economy.


Since the onset of trade and financial liberalization in the decade of the 1990s, the monetary policy framework of the Bank has placed greater emphasis on the use of market-based instruments (open market operations) rather than on direct policy instruments to effect monetary policy.

In mid-2002, the Central Bank implemented a new monetary policy framework based on the use of the Repurchase (‘Repo’) rate. This is the rate that the Central Bank charges commercial banks for borrowing funds on an overnight basis.  Changes in the ‘Repo’ rate are used to signal to the banking system the direction in which the Central Bank wishes short-term interest rates, and ultimately, the whole structure of interest rates, to move.  Movements in interest rates affect credit expansion which in turn affects inflation, employment and economic growth.


The Bank’s monetary policy framework has as its primary objectives, the maintenance of:

  • A low and stable rate of inflation
  • An orderly foreign exchange market; and
  • An adequate level of foreign exchange reserves

The conduct of monetary policy is influenced by the pace of real economic activity, the fiscal operations of the Government, trade and capital flows as well as the operations of financial institutions. In carrying out its monetary policy, the Bank also takes into account the potential implications for the foreign exchange market and the stability of the exchange rate.


Monetary Policy Committee

The Monetary Policy Committee (MPC) is responsible for the development and implementation of the Bank’s monetary policy framework. This Committee sets the ‘Repo’ rate, issues the Monetary Policy Announcement and oversees the preparation and publication of the semi-annual Monetary Policy Report. 

The MPC is assisted by a Monetary Policy Secretariat (MPS) which undertakes on-going analysis of the latest economic and financial information. The MPS is chaired by the Manager of Research and comprises staff from the Research, Information Services-Statistics Division and Reserves and Domestic Market Management Departments.

Members of the Monetary Policy Committee

Dr. Alvin Hilaire

Dr. Alvin Hilaire
Governor and Chairman of the Board

Dorian Noel

Dr. Dorian Noel
Deputy Governor,
Monetary Operations and Policy

Terrence Clarke


Mr. Alister Noel  
Mr. Terrence Clarke
Senior Manager, Macroeconomics/Finance
Mr. Alister Noel
Senior Manager, Operations   

Instruments of Monetary Policy

The Central Bank employs a range of both direct and indirect instruments to effect monetary policy.  The indirect or market based instruments largely comprise open market operations and the use of a policy interest rate- the ‘Repo’ rate, while the direct instruments mainly involve use of the statutory reserve requirements.  From time to time, the Bank also employs special facilities to absorb excess liquidity from the financial system.

Monetary Policy Communications

Monetary policy decisions of the Central Bank are usually communicated to the public via the 'Monetary Policy Announcement', periodically by way of special media releases and through the Monetary Policy Report which is published semi-annually.


Advance Calendar of Monetary Policy Announcements


Monetary Policy Announcements



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