Did entry in ERM II mean that the Central Bank of Malta ceased to set monetary policy in Malta?
No. Entry in ERM II did not affect the right of the Central Bank of Malta to set monetary policy in Malta. Throughout ERM II the Central Bank of Malta continued to determine official interest rates in Malta. The right to conduct monetary policy autonomously was only relinquished when Malta adopted the euro as its national currency on 1 January 2008. The Central Bank of Malta became fully integrated in the Eurosystem. The latter is composed of the European Central Bank and the central banks of the Member States that have adopted the euro as their national currency. The Central Bank of Malta participates in the formulation and implementation of the European Central Bank’s monetary policy through the Governor’s participation in the Governing Council.
Related Questions
- Did any adjustments need to be made to existing fixed interest rate commitments during the period Malta spent in ERM II?
- Did entry in ERM II require the transfer of reserves from the Central Bank of Malta to the European Central Bank?
- Did Malta’s entry in ERM II mean that the euro has became its national or legal tender currency?
