304 This adjustment package focused on fiscal and monetary tightening and the elimination of fuel subsidies. In February 2009, access to the ESF was based on the impact of commodity price surges on the balance of payments. 305 Information obtained by the CRM shows a strong track record in both policy implementation and performance, under the adjustment programme. Key policy objectives of a sharp drop in inflation and partially rebuilding of reserves were achieved, with inflation in the 12 months to June 2009 declining to 3 percent, aided by falling food price levels. Helped by increased donor assistance, foreign reserves ended the year at some US$ 1.5 billion (1.8 months of import cover). Monetary and Financial Policies 306 Ethiopia’s monetary policy continues to focus on maintaining price and exchange rate stability so as to create a conducive macroeconomic environment that promotes economic growth. To this end, the National Bank of Ethiopia (NBE) employed a mix of both direct and indirect monetary policy instruments to target money supply (M2), using the operational target rule. Major policy instruments include setting the minimum deposit interest rate, setting the reserve requirement ratio, selling Treasury Bills to mop up excess liquidity in the banking system – in 2006/07 the central bank increased the reserve requirement from 5.0 percent to 10.0 percent and aggressively sold treasury bills - and monitoring the ceiling set on Government borrowings from the banking system. Although the NBE has not explicitly adopted inflation targeting, the monetary policy objective for the next five years is to contain inflation below 10.0 percent. Government has also sought to restrain key prices directly by imposing a ban on maize exports and distributing wheat and edible oil to the urban poor. at subsidised prices. The CRM was informed by NBE officials of a strong political commitment to macroeconomic stability, significantly aiding monetary policy implementation. 307 The Monetary Policy Committee (MPC) is one of the NBE committees charged with formulating and directing monetary policy in order to deliver price stability and support government objectives for sustainable growth. The Governor of the NBE Chairs. Other members are the Deputy Governor, Directors of each Directorate of the Bank, and all the advisers to the Governor. In carrying out its mandate, the MPC successfully cooperates with the NBE macroeconomic department, as well as with the fiscal authority, represented by the Ministry of Finance and Economic Development (MOFED). Working hand in hand with the MPC is the country’s macroeconomic management team, chaired by the PM. Other team members are the NBE Governor and Deputy Governor, and the Minister for Planning and Economic Development. They meet on a monthly basis to review developments in the economy. Even though the CRM was unable to confirm the widely-acknowledged independence of the NBE, it is of note that - 132 -