At its meeting held on 20th August 2018, the Monetary Policy Committee (MPC) of the Bank of Mauritius decided to maintain the Key Repo Rate (KRR) at 3.50 per cent per annum.

The Committee discussed economic and financial developments at the global and domestic levels to make their decision. It noted that the global economy is maintaining its growth trend and that the IMF, in its World Economic Outlook Update published in July 2018, forecast that global growth should remain at its current level of 3.9 per cent for both 2018 and 2019. While threats to global growth have receded, higher uncertainty is seen arising from a few fronts namely trade frictions, increased pressure on global financial markets, currency volatility and the Brexit aftermath. It is expected that global inflation will go up in 2018 due to past increases in energy prices, but will remain unchanged in 2019.

At the domestic level, the Committee noted that inflation has gone down following a decrease in the adverse shocks to food prices and a downward adjustment in the prices of administered goods. Headline inflation dropped from a peak of 5.0 per cent in March and April 2018 to 4.0 per cent in July 2018. The Committee reckons that the overall outlook on the domestic economy remains positive and the Bank of Mauritius expects real GDP growth of 4.0% at market prices for both 2018 and 2019.

Based on the above, the MPC unanimously voted to keep the KRR at 3.50 per cent per annum.