The Bank of Mauritius’s Monetary Policy Committee (MPC) unanimously raised the Key Rate by 25 basis points to 5.00% per annum, citing the risk of inflation becoming entrenched above target despite downside risks to growth. The move followed a 25-basis-point increase to 4.75% in May 2026 and a hold in August. Headline inflation, measured using a 12-month moving average, reached 4.3% in October and is projected to exceed the central bank’s 2–5% target range in 2027. Inflation expectations remain anchored but hover at the target ceiling, while drought could add to food-price pressures. The central bank projects real gross domestic product growth of 3.0% in 2026, with financial services and tourism supporting activity while construction and manufacturing remain lacklustre. Globally, higher energy and food prices and persistent services inflation are broadening price pressures, while geopolitical tensions, maritime-route risks and trade-policy uncertainty threaten growth. The MPC acknowledged that higher rates would strain borrowers but judged timely action necessary to protect purchasing power and future growth. It will remain data-dependent and stands ready to act between regular meetings if necessary.
Bank of Mauritius Raises Key Rate by 25 Basis Points to 5.00%
The Bank of Mauritius’s Monetary Policy Committee unanimously raised the Key Rate by 25 basis points to 5.00% per annum, citing risks of inflation becoming entrenched above target despite downside risks to growth. Headline inflation is projected to exceed the 2–5% target range in 2027, while real gross domestic product growth is forecast at 3.0% in 2026.