The Bank of Mauritius kept its key interest rate at 4.75% at its August 13, 2026 Monetary Policy Committee meeting — a unanimous decision balancing a slowing but resilient economy against persistent inflationary pressures.
A unanimous hold
Governor Priscilla Muthoora Thakoor explained: "The MPC carefully balanced a domestic activity that is slowing but remains resilient, with persistent upside risks to inflation." The 4.75% rate has been in place since May 2026, when it was raised by 25 basis points to contain price increases.
Growth slowing, but holding
The Mauritian economy grew 2% in Q1 2026, down from 3.4% a year earlier. The BoM maintains its full-year forecast at 2.8%, supported by services, particularly tourism and financial services. First-half tourism revenues reached Rs 55.9 billion, up 17.9% year-on-year, while arrivals rose 2.1% between January and July.
Inflation: the key pressure point
Annual inflation climbed to 4.4% in July 2026 from 3.7% the previous month, driven by consumer goods price increases. Core inflation (core 2) stands at 6.2%, keeping the BoM on alert. The full-year inflation forecast was revised down to 5% from 5.5%, reflecting government subsidies on essential products.
An international environment under pressure
The IMF projects global growth to slow from 3.5% in 2025 to 3% in 2026, with global inflation expected at 4.7%. Middle East tensions, maritime route disruptions, and oil price volatility all pose risks to Mauritius' open, island economy.
Why it matters
The BoM's decision signals caution to economic operators: the tightening cycle is not over, but the central bank is choosing stability before moving further. For businesses and households, credit costs will remain elevated in the near term. The trajectory into 2027 will depend on incoming data — inflation, growth, and the global environment — all of which the BoM will monitor closely before any adjustment.