Mauritius Central Bank Lowers Key Rate to 4%

The Bank of Mauritius (BoM) has lowered its key rate from 4.5% to 4%, marking a significant shift after nearly a year of unchanged rates. This decision, made by the Monetary Policy Committee led by Governor Harvesh Seegolam, was announced on Friday, September 20, at the central bank’s headquarters in Port Louis.

Governor Seegolam explained that the reduction came amid resilient global economic growth and favorable price dynamics indicating a path towards reducing inflation in Mauritius.

He noted that the U.S. economy has performed better than expected, driven by strong consumer spending and business investments.

Additionally, he highlighted that the Eurozone is on a recovery trajectory, aided by robust service activity and increased consumer expenditures in the second quarter of 2024.

The British economy also remains dynamic, supported by rising government spending and household consumption, he added.

On a national level, Governor Seegolam pointed out the “robust” performance of key sectors such as hospitality, construction, finance, transportation, and both wholesale and retail trade.

Domestic consumption and investment are continuing to grow at a solid pace, buoyed by infrastructure projects and vigorous household spending.

Regarding inflation, the governor reported a downward trend, attributing it to stable international prices and normalized freight costs.

He explained that inflation in Mauritius has been steadily declining, largely reflecting a favorable global environment for food and energy prices.

Seegolam anticipates that, barring any major shocks, inflation should stabilize around 4% by the end of 2024.

On the issue of foreign currency, the governor noted that the BoM has actively intervened in the market since July 2024, with a total of USD 270 million sold to banks during this period.

Seegolam emphasized that the Mauritian rupee continues to reflect the fundamental economic principles of supply and demand as well as international currency movements.

He highlighted that between July 11 and September 18, 2024, the rupee appreciated by 2.2% against the U.S. dollar.

Source: l’Express