- Decision
- Maintain
- Rate change
- 0 bps
- key rate
- 4.5%
The Monetary Policy Committee of the Bank of Mauritius on 12 November 2025 unanimously kept the Key Rate at 4.50 %, judging that a “prudent wait-and-see” stance was warranted as medium-term inflation expectations need anchoring amid elevated global and domestic uncertainties and a still-solid, though moderating, growth outlook. After a 50 bp hike to 4.50 % in February, the rate has been left unchanged at the May, August and now November meetings. The central bank said it continues to mop up excess banking-system liquidity to align short-term market rates with the policy rate, and noted that foreign-exchange flows have improved while the rupee’s level reflects underlying fundamentals. Real GDP grew 3.6 % y/y in 2025Q2, with tourism rebounding, and the Bank now sees full-year 2025 growth at 3.1 % (3.0 % in 2026) despite weakness in construction and manufacturing; headline inflation is projected at 3.7 % this year, easing to 3.6 % in 2026, aided by lower commodity prices and government subsidies, though external shocks pose upside risks. Banks remain well capitalised and liquid, and the external position is supported by strengthening FX inflows. While global growth forecasts for 2025 have been revised higher on stronger activity in major economies and AI-related investment, downside risks persist from trade and geopolitical tensions that could also stoke inflation. The Committee reiterated its readiness to convene between scheduled meetings and act as needed to safeguard price stability and balanced economic development.
Rate evolution
From August 2025 to May 2026, the Bank of Mauritius held the Key Rate at 4.50 per cent through three meetings before lifting it by 25 basis points to 4.75 per cent. The August hold was presented as a finely balanced decision, with the Monetary Policy Committee weighing delicate domestic growth and downside risks from trade uncertainty and fiscal consolidation against rising but partly transient inflation, while also flagging sticky core and services inflation, tariff-related price pass-through risks, and improved foreign exchange conditions after earlier tightening and liquidity operations. In November 2025 and February 2026, the MPC maintained a prudent wait-and-see stance as activity proved resilient, tourism improved and inflation was forecast to ease or settle close to the mid-point of the target range, though medium-term inflation expectations still needed anchoring and downside growth risks and upside inflation risks from geopolitics and climate-related shocks persisted. In May 2026, the MPC shifted to tightening as the Middle East escalation and closure of the Strait of Hormuz lifted energy, food, freight and imported costs, pushed projected 2026 headline inflation to around 5.5 per cent, and raised concern about second-round effects.
On 12 August 2026, the MPC unanimously held the Key Rate at 4.75 per cent, taking a cautious approach as it balanced persistent underlying inflation and upside risks from geopolitical tensions, supply disruptions and external price shocks against downside risks to growth. The Bank lowered its 2026 headline inflation forecast to around 5 per cent and maintained its growth forecast at 2.8 per cent, while the MPC continued to assess the transmission of the May rate increase and recent budget initiatives and signalled readiness to act if necessary.