Mauritius Leaves Key Rate Steady as Policy Seen Held Until 2015

The Bank of Mauritius left its key lending rate unchanged for a fourth consecutive meeting and said it expects to maintain its monetary policy stance until the end of the year on the assumption inflation will remain stable.

The Monetary Policy Committee, led by Governor Rundheersing Bheenick, maintained the benchmark interest rate at 4.65 percent, the Port Louis-based central bank said in a statement today. The key rate has remained unchanged since June 28, 2013, when it was reduced from 4.9 percent.

“Against a background of subdued global and domestic inflationary pressures, the MPC unanimously decided to leave the key repo rate unchanged,” the bank said. “The MPC foresees maintaining this monetary policy stance up to the end of this year on the assumption that headline inflation will stay at or below 4 percent and year-on-year inflation at or below 3.5 percent, leaving aside unexpected supply shocks.”

Inflation in the Indian Ocean island nation slowed to 3.3 percent in June from 3.4 percent in May, Statistics Mauritius said on July 7. Headline inflation was unchanged at 4 percent. Last month, the agency revised down its forecast for economic growth this year to 3.5 percent from 3.7 percent, citing a continuing contraction in the construction industry.

“The best solution is to maintain the key rate as growth forecasts have been revised downwards, while inflation remained steady,” Eric Ng, managing director of PluriConseil Ltd., an advisory firm, said by phone before the announcement.

At the MPC’s previous meeting in April, Bheenick and his two deputies, Yandraduth Googoolye and Issa Soormally, voted to increase the key repo rate by 50 basis points, according to minutes of the meeting published on May 12.

Before it's here, it's on the Bloomberg Terminal.