The Bank of Mauritius has increased its benchmark interest rate by 50 basis points to 4.5% during its first monetary policy meeting under its new Governor Rama Krishna Sithanen. This marks the first rate hike in over two years, as the bank aims to stabilize inflation and manage exchange rate pressures. Annual inflation, which averaged 3.6% in 2024, is projected to rise slightly to 3.7% this year, exceeding the central bank’s target.
The decision reflects growing concerns over external risks, including potential disruptions from a US-led trade war that could drive up global inflation and import costs. The central bank emphasized a proactive approach to safeguard the economy against these uncertainties.
Economic growth in Mauritius is expected to slow to 3.5%-4% in 2025, down from 5.1% in 2024, as the country navigates these challenges.
