Mauritius Likely to Keep Interest Rates Unchanged on Dec. 6

Mauritius’s central bank will probably keep is benchmark interest rate unchanged at 4.75 percent on Dec. 6 to help support an economic recovery even as inflation accelerates.

The monetary policy committee will keep to its word of holding the repo rate steady for two quarters after cutting it by one percentage point cut in September, Eric Ng, director of the consultants PluriConseil, said in a phone interview from Port Louis, the capital.

The Indian Ocean island nation’s government and central bank are concerned an economic crisis in Europe may slow its expansion. Europe is the source of two-thirds of Mauritius’ tourism and the destination for 71 percent of its manufactured exports, according to the statistics office. The economy is estimated to grow about 4 percent this year and in 2011.

Mauritius doesn’t have room to cut interest rates further as inflation pressures are building, central bank Governor Rundheersing Bheenick said on Nov. 3. Inflation accelerated to 3.2 percent in October from 2.5 percent a month earlier, the Bank of Mauritius said.

“They will wait for the budgetary measures to be implemented, gauge its effect on the economy before the monetary policy revises its rate,” Chandan Jankee, associate professor of banking and finance at the University of Mauritius, said by phone.

To contact the reporter on this story: Kamlesh Bhuckory in Port Louis at kbhuckory@bloomberg.net.

To contact the editor responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net

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