Mauritian Prime Lending Rates Leap to 8.05% after Benchmark Rate Hike

Borrowers across Mauritius are facing a sharp increase in credit costs this month as major commercial banks hike their Prime Lending Rates to between 6.9% and 8.05%. The sudden surge follows the Bank of Mauritius’s decision to raise the benchmark Repo rate from 4.5% to 4.75%.

While savers will see minor relief with deposit yields rising up to 3.35%, consumer advocacy groups have strongly condemned the widening gap between what banks charge to lend and what they pay on savings.

The New Bank Rates Broken Down

The interest rate adjustments, which came into effect either on 1st June or 5th June, have been rolled out across the island’s leading financial institutions:

MCB (Effective 1st June): The Savings Rate has risen from 3.1% to 3.35%, while its Prime Lending Rate increased from 6.65% to 6.9%.

SBM (Effective 5th June): Its Savings Rate moved from 3.1% to 3.35%, with the Prime Lending Rate climbing from 6.95% to 7.1%.

Absa Bank Mauritius (Effective 1st June): Previously offering a maximum savings rate of up to 3.703% per year depending on the account type, it now offers an “Instant Savings Rate” of 3.35% per year. Its Prime Lending Rate has jumped from 7.45% to 7.7%.

MauBank (Effective 5th June): Savings rates shifted from a previous range of 2.95%–3.35% to a new range of 3.2%–3.4%. Its Prime Lending Rate saw an increase from 7.8% to a market-high of 8.05%.

Outcry Over Unfair Financial Burden

The central bank’s monetary tightening has sparked fierce criticism from the Consumers’ Eye Association (CEA), which is now calling for immediate regulatory intervention.

Claude Canabady, the secretary of the CEA, labeled the widening spread between borrowing and savings rates as inherently unfair to local citizens.

“It is unjust that those who borrow pay significantly more, while those who save receive far less,” Mr Canabady stated, demanding a comprehensive review by the Bank of Mauritius. “Why does such a massive gap exist between the two?”

The consumer champion warned that the higher Repo rate will severely strain households already dealing with heavy financial obligations.

“For individuals carrying debt or servicing loans to build homes and finance their children’s education, this represents a major burden.

The total repayment amounts are going to be considerably more substantial,” he added.

The Scale of the Market

The rate changes will directly impact millions of bank accounts across the country.

According to the latest data from the Bank of Mauritius, the island’s financial ecosystem comprises:

Source: Defi Media