Mauritius Interest Rate Decision for January 2026: Policy Steady Amid Mixed Macro Signals
Mauritius’ central bank maintained its benchmark interest rate at 4.50% for January 2026, as released on February 11, 2026. This marks an extended period of policy stability, with the rate unchanged since August 2025. The decision comes as inflation shows tentative signs of easing, while growth and external risks remain in focus.
Table of Contents
Big-Picture Snapshot
Drivers this month
- Policy rate held at 4.50% in January 2026, matching December 2025 and the 12-month average.
- Inflation eased to 6.1% YoY in January from 6.4% in December, but remains above the Bank’s 5% target.
- GDP growth for Q4 2025 estimated at 3.2% YoY, a modest uptick from Q3’s 2.9%.
Policy pulse
The Bank of Mauritius’ Monetary Policy Committee (MPC) cited persistent, though moderating, inflation and a need to support a nascent economic recovery as reasons for maintaining the policy rate. The decision aligns with consensus expectations and reflects a cautious approach amid global uncertainty.
Market lens
Immediate reaction: MUR/USD was unchanged at 0.0221 in the first hour after the print. Two-year government bond yields remained flat at 4.65%, while the SEMDEX equity index was little changed. Market participants interpreted the decision as a signal of policy continuity.
Foundational Indicators
Drivers this month
- Headline inflation: 6.1% YoY in January 2026 (vs. 6.4% in December 2025, 7.0% in November 2025).
- Core inflation: 5.8% YoY, down from 6.0% in December.
- Unemployment: 7.2% in Q4 2025, stable from Q3.
- Fiscal deficit: Estimated at 4.3% of GDP for 2025, narrowing from 4.7% in 2024.
- Current account deficit: 6.0% of GDP in 2025, reflecting resilient tourism receipts but higher import costs.
Policy pulse
The Bank’s inflation target remains at 5%. With headline inflation still above target, the MPC’s decision to hold rates signals a preference for gradual disinflation over aggressive tightening, especially as growth stabilizes and fiscal consolidation continues.
Market lens
Immediate reaction: SEMDEX rose 0.1% post-announcement, reflecting relief at no surprise tightening. The MUR’s stability underscores investor confidence in the central bank’s policy path.
Drivers this month
- Food and energy inflation contributed 0.22 percentage points to headline inflation, down from 0.31 in December.
- Services inflation remained sticky, offsetting gains from lower goods prices.
Policy pulse
The rate remains above pre-pandemic levels (3.35% in early 2020), reflecting a structurally higher inflation environment. The MPC’s statement emphasized data dependence, with a bias toward holding unless inflation expectations drift higher.
Market lens
Immediate reaction: MUR2YR yields were flat at 4.65%. The muted response suggests markets had fully priced in a hold, with breakeven rates signaling stable inflation expectations.
Forward Outlook
Drivers this month
- Inflation is forecast to average 5.5% in H1 2026, gradually converging toward target by year-end.
- GDP growth is projected at 3.5% for 2026, supported by tourism and construction.
- External risks include commodity price volatility and potential Fed tightening.
Policy pulse
The Bank of Mauritius is expected to maintain a cautious stance, with a bias toward holding rates through mid-2026. Upside risks to inflation could prompt a hike, but a downside growth surprise or global disinflation could open the door to cuts.
Market lens
Immediate reaction: MUR/USD forward rates were unchanged, with implied volatility near 12-month lows. Markets are pricing in a 70% probability of no change at the next meeting, a 20% chance of a hike, and a 10% chance of a cut.
- Bullish scenario (20%): Inflation drops below 5% by Q3 2026, enabling a rate cut and boosting equities.
- Base case (65%): Policy rate held at 4.50% through 2026, with gradual disinflation and steady growth.
- Bearish scenario (15%): External shocks drive inflation higher, forcing a 25bp hike and weighing on risk assets.
Closing Thoughts
Drivers this month
- Policy stability reflects confidence in the disinflation process and resilience in the domestic economy.
- Fiscal consolidation and external buffers provide room for maneuver if shocks emerge.
Policy pulse
The Bank of Mauritius’ steady hand is likely to anchor expectations, but vigilance is warranted as global risks persist. The next few months will be critical in determining whether inflation can sustainably return to target.
Market lens
Immediate reaction: No significant moves in MUR, bonds, or equities. Investors are watching for signals on the timing of the next policy shift.
Key Markets Likely to React to Interest Rate Decision
The following tradable symbols are closely linked to Mauritius’ interest rate policy. Their prices often respond to shifts in monetary policy, inflation, and macroeconomic outlook. Each symbol is selected for its historical sensitivity to rate decisions, currency moves, or broader risk sentiment in emerging markets.
- MSFT – Global tech stocks like Microsoft often react to EM rate decisions via risk appetite channels.
- TSLA – Growth equities are sensitive to global yield shifts, including those in frontier markets.
- EURUSD – The euro-dollar pair tracks global FX flows and often moves with EM currency sentiment.
- GBPUSD – Sterling’s moves can mirror risk-on/risk-off shifts tied to EM policy surprises.
- BTCUSD – Bitcoin is increasingly viewed as a hedge against fiat currency volatility, including in emerging markets.
| Year | Mauritius Policy Rate (%) | MSFT Price (USD, avg) |
|---|---|---|
| 2020 | 3.35 | 185 |
| 2021 | 3.35 | 290 |
| 2022 | 4.00 | 310 |
| 2023 | 4.00 | 330 |
| 2024 | 4.50 | 370 |
| 2025 | 4.50 | 410 |
Since 2020, MSFT’s price has trended higher even as Mauritius’ policy rate rose, reflecting global tech’s resilience to EM rate cycles. However, sharp rate hikes have occasionally coincided with brief risk-off moves in global equities.
Frequently Asked Questions
- What is the latest Interest Rate Decision for Mauritius?
- The Bank of Mauritius held its policy rate at 4.50% for January 2026, unchanged from December 2025 and the 12-month average.
- How does the Interest Rate Decision affect financial markets?
- Interest rate decisions influence bond yields, currency values, and equity prices, especially in emerging markets like Mauritius.
- What are the main risks to the current policy stance?
- Upside inflation surprises or external shocks could prompt further tightening, while a growth slowdown may lead to rate cuts.
Bottom line: Mauritius’ central bank is signaling patience, with a steady policy rate as inflation gradually recedes. Markets are watching for the next move, but for now, stability prevails.
Updated 2/11/26
- Sigmanomics database, Interest Rate Decision for MU, release 2/11/26
- Bank of Mauritius, Monetary Policy Committee statements, 2024–2026
- Statistics Mauritius, Consumer Price Index and GDP releases, 2024–2026
- Bloomberg, Market Data for MUR, SEMDEX, and bond yields, 2024–2026
Chart Dynamics
The policy rate for January 2026 was 4.50%, unchanged from December 2025 and matching the 12-month average of 4.50%. This stability follows a period of rate hikes in late 2024, when the rate rose from 4.00% in September 2024 to 4.50% in February 2025. Since then, the rate has been consistently held at 4.50% across six consecutive meetings (February, May, August, November 2025, and now January 2026).
Compared to the year-ago period (January 2025), the policy rate is unchanged, reflecting the central bank’s commitment to anchoring inflation expectations while supporting growth. The last move—a 50 basis point hike in February 2025—was in response to a sharp rise in imported inflation and currency pressures. Since then, inflation has moderated, and the policy stance has shifted to a holding pattern.