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AfricaMoney | August 18, 2017

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Monetary Policy Committee Maintains Key Repo Rate at 4.4% Per Annum

Monetary Policy Committee Maintains Key Repo Rate at 4.4% Per Annum

The Monetary Policy Committee (MPC) of the Bank of Mauritius has maintained the Key Repo Rate at 4.40% per annum. This decision was taken upon consideration on other alternative interest rate scenarios and after weighing the risks to the growth and inflation outlook as well as different factors in determining the Key Repo Rate.

The Monetary Policy Committee (MPC) of the Bank of Mauritius has maintained the Key Repo Rate at 4.40% per annum at its meeting held last week in Port Louis.

The Committee reached to a decision taking into consideration other alternative interest rate scenarios and after weighing the risks to the growth and inflation outlook as well as different factors in determining the Key Repo Rate.

On the domestic front the Committee observed that the economy grew by 3.7% in the third quarter of 2015, which is slightly above the 3.1% growth registered in the previous quarter and 3.6 per cent in the third quarter of 2014. However, it noted that the economy is still operating below its potential level, reflecting mostly with a slowing down in investment.

The MPC also discussed productivity trends and wage growth in the economy, debt levels and trends in non-performing loans in the banking sector and more importantly, took note of the evolution of excess liquidity in the banking system.

With regard to inflation indicators, it has been observed that inflation has continued to decline since the previous MPC meeting, on the back of low global commodity prices and persistent slack in the domestic economy. Headline inflation decreased from 1.7 per cent in June 2015 to 1.2 per cent in September 2015, and remained contained within 1.2-1.3 per cent range to date.

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