Mauritius won’t have “leeway” to cut interest rates further if fuel and food prices rise, said Rundheersing Bheenick, central bank chief of the Indian Ocean island nation.
Fuel and food prices are “uncertainty factors,” Bheenick said in an interview published today in the Port Louis-based l’Express Dimanche newspaper. “Inflation can be back on the rise. So interest rates probably won’t fall further, we will have no leeway.”
The Bank of Mauritius has reduced its benchmark rate twice since December, to 4.9 percent, in a bid to prod spending and boost economic growth, including a half-point cut in March that was the biggest since September 2010.
So far, though, the cuts haven’t had an impact on investment, Bheenick said. “I think there won’t be any.”
Statistics Mauritius lowered its growth forecast on March 30 to 3.6 percent from 4 percent on slowing tourism and textile demand from Europe, the country’s main source of revenue. Annual inflation slowed to 3.8 percent in March, the lowest since October 2010.
To contact the reporter on this story: Kamlesh Bhuckory in Port Louis at email@example.com
To contact the editor responsible for this story: Ana Monteiro at firstname.lastname@example.org