Banks in Mauritius are under pressure from a rise in non-performing loans in the tourism and construction industries and this contributed to the decision to maintain interest rates, central bank Governor Rundheersing Bheenick said.
Impaired credit rose to 5.3 percent of outstanding loans in the quarter through June from 4.6 percent in the prior period, according to Bank of Mauritius data released today.
Non-performing loans in the construction industry, which has total loans of 62 billion rupees ($2 billion) or 24 percent of outstanding credit, increased to 7.9 percent from 5.4 percent, according to the central bank. Non-performing loans in the hotel industry, which has total loans of 43 billion rupees, rose to 1.9 percent from 1.7 percent.
“We are witnessing degradation in non-performing loans; it’s quite fast,” Bheenick told reporters today in Port Louis, the capital, after the Monetary Policy Committee kept its benchmark interest rate at 4.9 percent. “The central bank should be very vigilant.”
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