Country Report Comoros March 2011

Outlook for 2011-12: Monetary policy

Monetary policy is dictated by Comoros's membership of the Franc Zone and is geared towards sustaining its currency peg to the euro. This restricts growth in the money supply and is an important source of price stability. Since 1999 the policy interest rates set by the Banque centrale des Comores (the central bank) have been aligned to the euro overnight index average. Growth in the euro zone is expected to remain weak and we do not expect a rate rise from the European Central Bank until mid-2012. Interest rates in Comoros are therefore likely to remain low. However, this is not expected to create undue price pressure, as financial markets remain thin and the money supply, rather than interest rates, is the prime instrument of monetary policy.

© 2011 The Economist lntelligence Unit Ltd. All rights reserved
Whilst every effort has been taken to verify the accuracy of this information, The Economist lntelligence Unit Ltd. cannot accept any responsibility or liability for reliance by any person on this information
IMPRINT