The Key Repo Rate remains unchanged at 1.85%. Economic operators will be pleased with this decision because they will not be worried about an increase in the cost of borrowing in Mauritius.
In a statement, the Bank of Mauritius explains that it is confident that an economic growth rate of 5.5% is achievable in 2021 in Mauritius. Indeed, the reopening of the borders, the improvement of the external demand, the easing of the monetary policy and the measures announced by the government to revitalize the economic activity will be beneficial for our economy.
Among other monetary measures, the Bank of Mauritius also notes that it has mopped up excess liquidity in the money market. This measure is intended to control inflation. The central bank also realigned short-term yields with interest rates. This measure tends to rebalance savings. Finally, in the foreign exchange market, the Bank has supplied foreign exchange to meet the demands of foreign currency traders. This measure serves to promote stability in the foreign exchange market.
Mauritius to achieve 3.5% inflation by 2021
The Bank of Mauritius is projecting an inflation rate of 3.5 percent in Mauritius in 2021.
Indeed, although there has been a recent rise in prices, due to supply-side pressures, the central bank explains that this rise will not last long. Ditto for the overall inflation rate, which has risen recently due to higher commodity prices, but this price increase is also expected to fade in 2022.
The Bank of Mauritius’ COVID-19 Support Scheme until June 2022 has helped revitalize economic activity, according to the Bank. It should also be noted that the International Monetary Fund (IMF) forecasts global growth rates of 6 percent in 2021 and 4.9 percent in 2022. But this is only an average : growth rates should vary significantly between countries.
