- Decision
- Maintain
- Rate change
- 0 bps
- key rate
- 4.5%
The Monetary Policy Committee of the Bank of Mauritius kept the Key Rate at 4.50 % per annum at its 11 February 2026 meeting, judging that a steady stance best balances easing global and domestic inflation with still-uncertain growth and geopolitical risks. After a 50 bp hike in February 2025 the rate has been on hold through subsequent meetings. The central bank will continue to manage excess banking-system liquidity so that short-term market rates remain aligned with the policy rate. Domestically, real GDP is projected to expand by 3.3 % in 2026, supported by robust tourism and financial services and an expected recovery in construction, while headline inflation edged up to 3.8 % in January but is seen ending the year at 3.6 %, comfortably within the 2–5 % target band despite possible weather-related food price swings and geopolitical risks. The foreign-exchange market has stabilised, with rate movements driven by both local and external factors, and stress tests confirm banking-sector resilience. The IMF has lifted its global growth forecast for 2026 to 3.3 %, although risks from AI-related capital-flow volatility, trade fragmentation and geopolitical tensions persist. The committee signalled a “prudent wait-and-see” approach and reiterated its readiness to adjust policy if 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.