Mauritius’s central bank will probably cut its benchmark interest rate to a record low today to help boost economic growth in the Indian Ocean island nation.
The Monetary Policy Committee, led by Governor Rundheersing Bheenick, may lower the repo rate by a quarter of a percentage point to 4.65 percent, according to the median estimate of 11 economists surveyed by Bloomberg. The decision will be announced on the central bank’s website at 6 p.m. in Port Louis, the capital. The bank reduced the lending rate at the last two meetings.
“Given that inflation is under control, the risks to growth and an increase in job losses, there is sufficient space for the MPC to go for another decrease,” Raj Makoond, director of the Joint Economic Council, an industry grouping, said in a phone interview on June 8.
Mauritius’s economy is struggling because of the slowdown in Europe, its biggest market for tourism and exports. The European debt crisis has already cut the island nation’s economic growth rate by 1.4 percentage point to 3.6 percent, according to Finance Minister Xavier Luc Duval.
Inflation was unchanged in May from the previous month at 3.8 percent, the lowest level in 19 months and below the central bank’s target of 4 percent to 6 percent.
“We believe there is room for a 0.5 percent cut given heightened concerns around domestic growth and global growth uncertainties,” Ridle Markus, Africa strategist at Absa Bank Ltd. (ABSP), said in an e-mailed response to questions on June 6.
Mauritius’s rupee weakened 0.8 percent against the dollar to 30.1 by 11:20 a.m., in Port Louis, the capital, extending its losses this year to 2.6 percent, according to data compiled by Bloomberg.
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