Monday, September 12, 2011

Bank of Mauritius Holds Repo Rate at 5.50%

The Bank of Mauritius held its benchmark interest rate unchanged at 5.50%.  The bank said it "noted that global economic activity is expected to recover more slowly than had been anticipated at its last meeting due to heightened uncertainty over the growth outlook.  While the threat of a new round of rapidly rising international commodity prices has lessened, there are still significant concerns that supply constraints could continue to pose upside risks to the inflation outlook, especially in fast-growing emerging economies.  The MPC has also noted that, against the background of weakening global growth prospects, a number of central banks in advanced and emerging economies have maintained interest rates at current levels."

Previously the Bank of Mauritius raised its repo rate by 25 basis points to 5.50% at its June meeting, after raising 50 basis points in March this year to 5.25%.  Mauritius reported inflation of 6.5% in August, down slightly from levels seen earlier in the year e.g. 7.2% in March, and 6.8% in February, meanwhile the bank expects inflation to decline to around 5.1% by June 2012.  The Bank revised its forecasts downward slightly and now expects the economy to grow about 4.4% this year (4.6% previous forecast), having recorded annual GDP growth of 4.4% in 2010.


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