The central bank of Mauritius left its key repo rate (KRR) unchanged at 4.0 percent, noting that the country's economy is operating below its potential and inflation remains muted.
The Bank of Mauritius, which cut its rate by 40 basis points in July, said its staff was now projecting Gross Domestic Product growth of 3.5 percent for this year, down from 3.6 percent that was forecast in July, and between 3.8 and 4.0 percent for 2017.
"It is expected that the implementation of major infrastructure projects as announced in the Budget should give a boot to investment in 2017," the bank said.
In July the central bank revised down its 2016 growth forecast to 3.6 percent from 3.8 percent and forecast 3.8 percent growth for 2017.
In 2015 Mauritius' GDP grew 3.1 percent and in the second quarter of this year it grew by an annual rate of 3.7 percent, up from 3.6 percent in the first quarter.
Inflation in Mauritius rose to 1.5 percent in October from 0.9 percent in the two previous months on subdued global commodity prices and "persistent slack in the domestic economy," the bank said.
The central bank forecasts an average rate of around 1.0 percent this year, rising gradually to 2-3 percent in 2017.
In addition to the state of the economy, the bank's Monetary Policy Committee took note of its efforts to mop up excess liquidity in the banking system and discussed the new monetary policy framework that it plans to implement in early 2017, the first change in framework since the current system was implanted in December 2006.
The Bank of Mauritius issued the following statement: