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Mauritian Households Under Strain as Debt Hits Rs 281 Billion
Mauritian household debt has surged to a staggering MUR 281.1 billion, representing 39.2% of the nation’s GDP, according to the latest figures released by the Bank of Mauritius (BoM). The December 2025 Financial Stability Report reveals a tightening financial squeeze on families, with debt-to-income ratios hitting a symbolic 109.5%.
While the central bank maintains there is no “immediate systemic risk,” the report warns of a progressive weakening of household finances amid rising interest rates and a cooling fiscal climate.
Anticipatory Borrowing and Rising Costs
The sharp acceleration in borrowing during the second quarter of 2025 has been attributed to “front-loading.”
Analysts suggest households rushed to secure loans before the introduction of less favourable tax measures.
However, this rush to credit is proving costly. Following a 50-basis-point hike in the key interest rate in February 2025, debt-servicing costs now consume 17.9% of household income.
The BoM noted that while these levels are comparable to the pre-2024 monetary easing phase, the trend clearly indicates that repayments are increasingly eating into private savings and general consumption.
Key Financial Indicators (as of June 2025)
| Indicator | Value |
| Total Household Debt | MUR 281.1 billion |
| Debt as % of GDP | 39.2% |
| Debt-to-Income Ratio | 109.5% |
| Debt Service as % of Income | 17.9% |
| Foreign Currency Deposits | USD 1.9 billion |
The Flight to Foreign Currency
In a notable shift in financial behaviour, Mauritians are increasingly ditching the rupee for the dollar.
Foreign currency deposits soared to USD 1.9 billion in the first half of 2025, accounting for 15.4% of total deposits—a significant jump from just 9.5% in 2019.
With an average annual growth rate of 20.9%, these foreign holdings are outstripping rupee-based savings.
The BoM suggests this trend is driven by a desire to hedge against perceived currency depreciation, despite the rupee not showing a continuous decline against the US dollar.
The central bank also noted that the spike likely stems from the repatriation of assets held abroad.
A Warning on Sustainability
The report concludes with a “nuanced but firm” warning regarding the housing market. With property prices outstripping income growth, accessibility is becoming a major hurdle, particularly for low-income earners.
The BoM warned that while a crisis is not imminent, imbalances are “slowly accumulating.” Should the economy face further interest rate shocks or stagnant income growth, the financial resilience of Mauritian households could be tested to its limits.
Source: l’Express
