The currency basket : a study on the Maltese lira commissioned by the Confederation of Private Enterprise

Abstract

This study on issues related to the value of the Maltese Lira was completed concurrently with the presentation of the Government's Budget for 1986. In his Budget Speech, the Finance Minister referred to three issues considered in this report, namely, the implementation of a 'more active Monetary Policy', the introduction of an export-subsidy scheme, and the 'slight' modification in the currency basket, to which the Lm/$ rate of exchange is pegged, by including 'the principal currencies of tourists visiting Malta in addition to the currencies of Malta's main trading partners'. Notwithstanding these policy changes, the study is submitted to readers as originally written. The policy innovations or modifications regarding the determination of the controlled rate of exchange of the Maltese Lira and export subsidies were already treated in the text and the conclusions are not affected by the proposed policy alterations.