Mauritius’ central bank has raised its key interest rate by 25 basis points to 4.75 percent, citing rising inflation risks and heightened global uncertainty linked to energy markets and geopolitical tensions.
The Bank of Mauritius (Bank of Mauritius) said Wednesday that imported inflation had increased due to higher energy prices and rising freight and logistics costs, warning that external pressures were re-emerging.
It was the first rate hike in more than a year, with the policy rate previously held at 4.50 percent since February 2025.
The central bank said elevated global uncertainty, including spillovers from the Iran conflict, had increased the risk of sustained price pressures through energy and transport channels.
It warned that if energy prices remain high or rise further, inflation could accelerate through both direct and second-round effects, affecting transport, utilities, food processing and services.
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Under its baseline scenario, inflation is expected to average around 5.5 percent this year. However, the bank said more adverse scenarios could see inflation remain elevated for longer than expected.
Alongside the rate decision, the central bank revised down its economic growth forecast to 2.8 percent from a previous range of 3.3 to 3.5 percent, citing weaker household purchasing power and softer tourism activity.
Mauritius, a tourism-dependent island economy in the Indian Ocean, has been particularly sensitive to global travel trends, energy prices and shipping costs.
The bank said higher fuel and electricity costs are expected to weigh on consumption, while increased logistics expenses could affect both imports and export competitiveness.
Tourism, a key pillar of the economy, is also expected to face headwinds if global inflation continues to erode travel demand.
The rate increase signals a shift toward tighter monetary policy after a prolonged period of stability, as policymakers respond to renewed external inflation pressures.
Analysts say Mauritius’ move reflects a broader trend among emerging and small open economies facing imported inflation from energy shocks and global supply disruptions.
The central bank said it will continue to monitor global developments closely and adjust policy if inflation risks intensify further.
