By Radarr Africa Business Desk
PORT LOUIS, November 13 (Radarr Africa) – The Bank of Mauritius raised its key rate by 25 basis points to 5.0 per cent from 4.75 per cent on Wednesday, saying it needed to act before inflation became entrenched above its target range.
The central bank’s Monetary Policy Committee took the decision unanimously. It said “a timely and proactive action was required,” and warned that delaying an adjustment would hurt the purchasing power of households and businesses more.
The move is the first change in the key rate since May, when the bank also raised it by 25 basis points. The committee left the rate at 4.75 per cent at its August meeting.
Annual inflation rose to 6.4 per cent in October, above the bank’s target band of 2 to 5 per cent, according to figures from Statistics Mauritius published on Tuesday. Inflation was 5.7 per cent in September and 4.9 per cent in August, and the October reading was the fastest pace since June 2023. Prices rose 0.6 per cent from September to October, and the consumer price index moved from 114.1 to 114.8. The 12-month average rate, which Statistics Mauritius uses as its headline measure, was 4.3 per cent, up from 4.1 per cent.
Transport costs were the biggest driver. Transport prices were up 11.4 per cent on the year, including a 3.8 per cent rise in October alone. Restaurants and accommodation rose 9.4 per cent over the year, and housing, water, electricity and gas rose 8.9 per cent. Food and non-alcoholic drinks were up 6.1 per cent on the year but fell 0.2 per cent from September. Communication was the only major group to fall, down 1.2 per cent.
The central bank projects inflation at 4.7 per cent in December 2026 and 5.5 per cent in December 2027. It flagged energy and commodity price risks as the main upside threats, and said an ongoing drought could disrupt agricultural output in 2027 and speed up food inflation.
On growth, the bank projects the economy will expand by 3.0 per cent in 2026 and 3.2 per cent in 2027.
The rise in the key rate follows four straight months of rising annual inflation, which stood at 3.7 per cent in June.
