The Bank of Mauritius kept its Key Repo Rate unchanged at 4.75% at its Monetary Policy Committee meeting on 12 August 2026. The unanimous decision reflects a cautious, data-driven stance as inflation ticks back up and economic growth remains under pressure.
Inflation on the Rise Again
The warning signal comes from prices: headline inflation climbed to 4.4% year-on-year in July 2026, up from 3.7% in June. The Committee noted that core inflation remains « elevated » and that « risks are tilted to the upside ». In plain terms, the central bank is reluctant to cut rates in an environment where price pressures remain uncertain.
For 2026, the Bank of Mauritius slightly revised its inflation forecast downward to approximately 5% (from 5.5% initially), factoring in budget subsidies on staple goods announced in the Finance Bill.
2.8% Growth Under Watch
The island's economic growth is projected at 2.8% for 2026, a figure held steady from May estimates. It continues to be driven by two pillars: tourism and financial services, even as activity slowed in Q1. Geopolitical tensions, supply chain disruptions and potential weakening of external demand are the main downside risks identified.
A Wait-and-See Logic
Following a 25-basis-point hike decided in May 2026, the Monetary Policy Committee chose to observe. The language used captures the mindset clearly: adopting « a cautious wait-and-see stance, enabling the MPC to assess incoming data, inflation and growth risks, and the impact of previous measures ».
This pragmatic approach means the Bank of Mauritius commits to neither an imminent hike nor a near-term easing. It remains in listening mode in a global environment it describes as « highly uncertain ».
Why It Matters
For Mauritian businesses and households, holding the rate at 4.75% extends current borrowing conditions. For investors, it signals monetary stability on an island seeking to consolidate its position as Africa's financial hub against competition from Dubai and Singapore. The next MPC meeting will be closely watched: if inflation climbs back above 5%, another rate hike before year-end cannot be ruled out.
Source: Bank of Mauritius / TradingEconomics, 12 August 2026