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# Bank of Mauritius raises Key Rate by 25 basis points to 5.00% as year-on-year inflation hits 6.4%
- URL: https://www.theglobalbanker.com/bank-of-mauritius-raises-key-rate-by-25-basis-points-to-5-00-as-year-on-year-inflation-hits-6-4/
- Published: 2026-11-11T21:46:45.000Z
- Updated: 2026-11-11T21:46:45.000Z
- Description: The Bank of Mauritius raised its Key Rate by 25 basis points to 5.00% on Wednesday 11 November, after year-on-year inflation reached 6.4% in October.
- Author: TGB Editorial Team
- Tags: Central Banks, Africa, #newsroom, #needs-photo

The Monetary Policy Committee of the Bank of [Mauritius](https://www.theglobalbanker.com/market-mauritius/) voted unanimously on Wednesday 11 November to lift the Key Rate by 25 basis points to 5.00% a year. The Bank said the decision was driven mainly by the risk of inflation settling above the upper end of its target range.

The increase takes the rate from 4.75% and is the second this year, as price pressures spread across the economy. "The Committee judged that a timely and proactive action was required and that a delayed rate adjustment to contain inflation would have a more adverse impact on the purchasing power of households and businesses," the statement said, according to Reuters.

## INFLATION SPREADS ACROSS THE BASKET

Year-on-year inflation accelerated from 4.4% in July to 6.4% in October, the Bank said, against a target range of 2% to 5%. Its headline measure, a 12-month moving average, rose more slowly, from 4.0% to 4.3% over the same period.

The share of items in the consumer price basket rising by more than 5% climbed from 33% in January to 47% in October, while the share with falling prices almost halved, from 23% to 12%. One-year inflation expectations stood at 4.9% and five-year expectations at 5.0% in the Bank's September survey, at the ceiling of the target range.

The Committee raised the rate to 4.75% from 4.50% in May and held it in August. The Bank acknowledged that higher rates strain borrowers but said price stability and anchored expectations come first.

## A CONCENTRATED BANKING SYSTEM

Mauritius has 18 licensed banks, a mix of domestic and foreign-owned institutions, with domestic-owned banks holding around 80% of total assets, according to the TGB market profile. Banks account for nearly 90% of domestic financial sector assets.

Four banks are designated domestic systemically important: The Mauritius Commercial Bank, SBM Bank (Mauritius), Absa Bank (Mauritius) and AfrAsia Bank. The Herfindahl–Hirschman index rose to 1,844 in December 2025, indicating a moderately concentrated market in which the two largest of these banks hold a significant share of assets.

## PROJECTIONS AND RISKS

The Bank projects headline inflation at 4.7% in December 2026 and 5.5% in December 2027, which would put it above its target range next year. The economy grew 3.0% in the second quarter, up from 1.7% in the first, led by finance, insurance and tourism, and the Bank forecasts growth of 3.0% for 2026 and 3.2% for 2027.

The Bank named the Middle East conflict, which has disrupted energy supply, risks to key shipping routes, higher energy and food prices and an ongoing drought as upside risks to prices. It said the drought may disrupt agricultural output in 2027 and accelerate food inflation. The Bank has not said whether more increases are planned, only that it is data-dependent and ready to act between regular meetings.

## THE TGB VIEW

MCB Group ranks 9th in TGB's table of the largest banks in Sub-Saharan Africa 2026, which is ranked by total assets, with US$22.2bn of assets and a return on equity of 15.3% for the year to June 2025\. The Herfindahl–Hirschman index for Mauritius rose to 1,844 in December 2025, a moderately concentrated market in which the two largest D-SIBs hold a significant share of assets, and the Bank acknowledged that higher rates strain borrowers. The next dated step is the minutes of the 11 November meeting, due on 25 November 2026, which should show how members weighed growth against inflation.