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The central bank of Mauritius, the Indian Ocean island, left its benchmark repurchase rate steady at 3.50 percent as it lowered its 2018 estimate of inflation further while maintaining the outlook for inflation next year.


The Bank of Mauritius (BOM), which has kept its rate steady since cutting it in September 2017, projected that 2018 inflation would average 3.2 percent, down from the August forecast of 3.5 percent and May's forecast of 4.2 percent. Inflation in 2017 averaged 3.7 percent.


After rising to 7.0 percent in February, inflation in Mauritius decelerated sharply to 1.0 percent by June as shocks to food prices subsided and some administered prices fell. Since then inflation has picked up speed and rose to 2.8 percent in October from 1.9 percent in September.

Barring major shocks to supply, BOM forecast 2019 inflation of 3.0 percent, as in August.


The economy of Mauritius has slowed in recent quarters but BOM left unchanged its forecast for growth to average 4.0 percent this year and next year, up from 3.5 percent in 2017, supported by rising consumption and public infrastructure investment.


Year-on-year Mauritius' gross domestic product grew 3.7 percent in the second quarter, down from 4.1 percent in the first quarter.


"The MPX weighted the risks to growth and inflation outlook and concurred that monetary conditions are currently appropriate and supportive of economic growth and price stability," BOM said.


The Mauritian rupee has been relatively stable since June after depreciating in the first half of the year. Today the rupee was trading at 34.6 to the U.S. dollar, down 2 percent this year.

 

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