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Mauritius Central Bank keeps repo rate at 1.85%

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The Monetary Policy Committee(MPC) of the Bank of Mauritius (BoM) has kept the Key Repo Rate unchanged at 1.85% per annum.

The International Monetary Fund (IMF) has, in its October 2021 World Economic Outlook (WEO), forecast global growth at 5.9% for 2021 and 4.9% for 2022, “assuming that there will be further progress in vaccine coverage and that accommodative fiscal and monetary support remains in place.”

The domestic economy bounced back in 2021Q2 with a year-on-year growth of 19.3%.

Going forward, the economy is most likely to see positive growth as sentiment gradually improves with the ongoing vaccination campaign and the full reopening of borders. The Bank maintains its previous projection of real GDP growth at about 5.5% for 2021.

The BoM said it continues to manage excess rupee liquidity in line with its monetary policy stance. Short- term yields remained within the interest rate corridor in 2021Q3.

It also intervened on a regular basis to address undue exchangerate volatility and to ensure adequate supply of foreign exchange to the market.

While there is still uncertainty on price dynamics worldwide, the Central Bank said supply-side influences are expected to fade away in 2022. “In the absence of further external shocks, the Bank is forecasting headline inflationat about 3.8% for 2021.”

The MPC said it considers that the current monetary policy stance is appropriate and supportive of economic recovery.

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