Tuesday, December 13, 2011

Bank of Mauritius Cuts Rate 10bps to 5.40%

The Bank of Mauritius trimmed its benchmark interest rate by 10 basis points to 5.40% from 5.50%.  The bank said: "The MPC observed a decline in externally-generated inflationary pressures.... The MPC is of the view that the Key Repo Rate is  broadly appropriate in view of the expected impact of the 2012 budget measures. However, to signal its concern about the low level of business and consumer confidence, it has decided to cut the Key Repo Rate by 10 basis points."

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 5.5% by June 2012.  

The Bank revised its forecasts downward slightly and now expects the economy to grow about 4.1% this year (4.6% previous forecast), having recorded annual GDP growth of 4.4% in 2010.  The Mauritian Rupee (MUR) has gained about 5% against the US dollar so far this year, with the USDMUR exchange rate trading around 29.35


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