The Monetary Policy Committee (MPC) of the Bank of Mauritius brought down the Key Repo Rate from 4.00 % per annum to 3.50 % per annum, with effect from 6th September 2017. This decision was taken after weighing the risks to growth and inflation.

The MPC observed that the domestic economy grew at 3.4 % year-on-year in the first quarter of 2017, compared to 3.8 % for the same period in 2016 and 4.2 % in the fourth quarter of 2016. The Committee further noted that while investment spending was bolder, final consumption expenditure remained moderate and export of goods and services kept decreasing. Hence, the MPC viewed that there was a strong need to stimulate investments into the productive sectors of the economy and projects that real GDP to grow from 3.6% to 3.8% for 2017 and to 4.2% for in 2018.

The Committee also observed that, except for any major shock, the forecast for headline inflation is about 4.0 % for 2017 and about 3.8 % in 2018, and views that inflation is unlikely to pick up significantly as the base effects eventually taper off.