Bank of Mauritius cuts the Key Repo Rate by 25 basis points to 4.40 per cent

Port Louis, Capital Markets in African — The Monetary Policy Committee (MPC) of the Bank of Mauritius (Bank) has unanimously decided to cut the Key Repo Rate by 25 basis points to 4.40 per cent per annum to boost domestic economic activity, at its meeting on Monday 9 November 2015. The Key Repo Rate had been kept at 4.65 percent since June 2013 when it was reduced by 25 basis points from 4.9 percent. See chart below for the historical evolution of the Key Repo Rate from December 2006.

In the press release, the reduction to the Key Repo Rate was attributed to slow in global economic recovery and possibly increased in the inflation rates.  As a result of weak in global and emerging economic outlook, the Bank of Mauritius has revised down its growth forecast for the economy to 3.4 per cent from 3.7 percent. The bank also forecast year-on-year inflation to be at 2.6 percent at the end of 2015, rising to 3.3 percent at the end of next year.

Furthermore, MPC highlighted that the negative output gap is projected to persist during 2016, however, the committee welcomed the decision of government to accelerate project implementation to address the declining investment trend.