- Decision
- Maintain
- Rate change
- 0 bps
- Policy rate after decision
- 4.75%
The Bank of Mauritius Monetary Policy Committee (MPC) unanimously held the Key Rate at 4.75% per annum, adopting a cautious stance as inflation eased but remained subject to upside risks while resilient economic growth faced downside risks. The rate had been held at 4.50% from August 2025 through February 2026 before a 25-basis-point increase in May. The MPC noted the transmission of that increase to saving and lending rates and reviewed ongoing open market operations. Headline inflation edged down to 4.0% in July, while underlying inflation remained elevated and persistent, and the central bank lowered its 2026 headline inflation forecast to around 5.0% due to inflation outcomes and recent subsidies. It maintained its 2026 growth forecast at 2.8%, supported by tourism and financial services, and said stress tests showed the banking sector remained resilient with adequate capital and liquidity buffers. Renewed Middle East tensions, risks to maritime routes, volatile energy prices and elevated freight costs continued to threaten global growth and inflation. The MPC said it would remain vigilant and data-dependent and stood ready to act between regular meetings if necessary.
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.