Central bank to hold Key Repo Rate?

The Bank of Mauritius could be one among the Central Banks of six sub-Saharan African countries that are likely to leave borrowing costs unchanged over coming weeks.

This coincides with a resurgence of coronavirus infections driven by the highly transmissible delta variant threatening to choke off lackluster economic recoveries, Bloomberg reported.

“After postponing its MPC meeting that was scheduled for May, Mauritian policy makers must now weigh leaving the key rate at a record low to support an economy that contracted the most in four decades in 2020 against taming inflation that’s at a three-year high,” it said.

While the MPC will probably hold the benchmark next month, indicators show that Mauritius has “reached the end of an accommodative cycle,” Bloomberg cited Bhavish Jugurnath, an economist and lecturer at the University of Mauritius as saying.

“We could see a tightening of monetary policy as inflation is accelerating due to higher import prices and a weakening rupee.”