GIS - 06 May, 2014: The Key Repo Rate has been maintained at 4.65 per cent per annum following a meeting of the Monetary Policy Committee (MPC) of the Bank of Mauritius held last week in Port Louis.
The MPC took this decision taking into consideration other alternative interest rate scenarios as well as after weighing the risks to the growth and inflation outlook.
On the domestic front, the Committee observed that the economic activity is projected to pick up as recovery is expected in the main export markets. The GDP growth forecast has accordingly been maintained by the MPC within a range of 3.7-4.0 per cent for 2014, up from an estimate of 3.2 per cent for 2013.
The MPC further noted that year-on-year inflation had risen to 4.5 per cent in March 2014, from 4.0 per cent in December 2013, reflecting mostly fluctuations in fresh vegetables prices. On a no-policy change basis, Bank Staff forecast year-on-year inflation is estimated within a range of 3.9 per cent to 4.1 per cent by June 2014 before increasing to a range of 3.9 per cent to 4.3 per cent by December 2014.
Regarding the global economy, the MPC observed that it has improved since the February 2014 MPC meeting. However, growth remains slow and uneven while economic activity is projected to expand quite rapidly in the US and UK and at a slower pace in the Eurozone. According to the Committee, the growth outlook for emerging economies has been downgraded.
The MPC also noted that though global inflation is relatively low, a number of emerging market and developing economies have recorded significant inflationary pressures due to weaker currencies. While global oil prices have subsided, global food prices have increased sharply in the first quarter of the year, it concluded.
In the light of the above scenario, the MPC continues to maintain strong vigilance in monitoring the economic and financial developments and remains ready to intervene if the need arises.
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