Mauritius Interest Rate

The Bank of Mauritius trimmed its benchmark interest rate by 50 bps to 4% on September 20, 2024, from 4.5% previously, where it had been since December 2022. This marks the first rate reduction since April 2020, amid easing price pressures. The MPC stated that while growth remains consistent, the ongoing disinflationary process is well entrenched in 2024 and appears set to achieve the medium-term target of 3.5%, with upside risks to the inflation outlook subsiding. In its words, headline inflation fell from 11.3% in February 2023 to 4% in August 2024, marking 18 consecutive months of decline and remaining within the inflation target range of 2-5%. Core measures of inflation also remained engaged on a firm downward trend. Barring any further shocks, headline inflation is anticipated to reach around 4% by the end of 2024. Concerning economic activity, the Bank maintained its projection of real GDP growth at around 6.5% for the year.

The Central Bank of Mauritius unanimously decided on July 11th, 2024, to maintain the key repo rate unchanged at 4.5%, the highest level for borrowing costs since October 2015. Policymakers said that recent inflation data indicates the ongoing disinflationary trend will likely persist in the second half of 2024. Annual inflation fell to 2.2% in June due to the normalization of fresh vegetable prices, with core measures also continuing to decline. Meanwhile, domestic economic activity is expected to remain strong in 2024, with projected real GDP growth at 6.5% for the year. However, the central bank noted that both growth and inflation outlooks are subject to downside risks originating from external factors.

The Central Bank of Mauritius unanimously decided to keep its key repo rate steady at 4.5% during a regular meeting on April 3rd, 2024, maintaining borrowing costs at their highest level since October 2015. The Committee affirmed that the current monetary policy stance supports the Bank's mandate for price stability and orderly economic development. Policymakers observed a further decline in headline inflation in Mauritius in February 2024 and expect it to continue decreasing to around 4.9% by December 2024, aided by favorable global commodity prices. Additionally, core inflation measures, which signal underlying inflationary pressures, have softened. The Bank reported solid growth of 7.3% in the domestic economy in Q4 2023, driven by major infrastructure projects and robust tourist arrivals. Economic activity is expected to remain strong in 2024, with the tourism sector benefiting from global demand for holiday travel, improved flight connections, and efforts to diversify tourism.