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The central bank of Mauritius left its benchmark repurchase rate at 3.50 percent, but raised its forecast for inflation this year to 4.0 percent from 3.5 percent forecast in November, noting the rise in inflation in recent months.


The Bank of Mauritius (BOM), which last September cut its rate for the first time since July 2016, said the rise in inflation since the previous meeting of its monetary policy committee in November was mainly due to transitory supply-side shocks, with a surge in vegetables prices in January due to adverse weather following a rise in domestic petroleum prices in December 2017.


Inflation in the Indian Ocean island of Mauritius rose to 6.2 percent in January from 4.2 percent in December and 3.6 percent in November.

However, BOM added that core measures of inflation "remained subdued."


Earlier in 2017 inflation accelerated due to higher the prices of alcohol, tobacco and diesel oil and hit a 5-year peak of 6.4 percent in June.


The economy of Mauritius grew by 3.6 percent in the third quarter of last year, down from 4.2 percent in the second quarter and 3.7 percent in the third quarter of 2016, BOM said, adding growth was supported by higher investment activity and stable consumption spending.


"The MPC expects that the economic recovery would be sustained in 2018," BOM said, adding the baseline projections for GDP growth this year is 4.0 percent, down from 4.2 percent earlier forecast.


The Mauritian rupee, which tumbled in 2015, has been rising steadily since early 2017 but weakened this month.


Today the rupee was trading at 33.85 to the U.S. dollar, marginally up from 33.9 at the start of the year and up 5.9 percent since the start of 2017.

 

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