Rundheersing Bheenick: "The Situation is Not Dramatic"

The problem, however, is the decline in real interest rates discourage saving and growth continues to falter in developed countries. It is in these terms that spoke Rundheersing Bheenick, Governor of the Bank of Mauritius, at a press conference on Tuesday to explain the decision of the Monetary Policy Committee (MPC) to reduce the Key Repo Rate 25 basis points Monday .

The Monetary Policy Committee has faced two views. In a presentation that lasted almost 45 minutes, the Financial Secretary has called for a reduction of Key Repo Rate by 50 basis points. The Consumers' Association of Mauritius (ACIM), for his part, called for an increase in the Key Repo Rate by 15 to 25 basis points, based on the argument that inflation is still a threat for the country, with a much more substantial impact on the middle class. PMAC also suggested that growth is not inclusive and that the gap between rich and poor.

The governor explained that the central bank, she has advocated for an increase of 10 to 25 basis points. But, by majority vote, it is the lower Repo Rate by 25 basis points prevailed. Rundheersing Bheenick has reviewed the topics that have caught the attention of the MPC.

The governor said that inflation is more concerned PMAC that the Ministry of Finance. And that inflation and price stability were included in the constitutional laws of the central bank.

Since January, the downward trend in the rate of inflation 'year-on-year' has reversed, said the governor of the Central Bank. Thus, in the coming months, the year-on-year inflation rate will continue to follow an upward trend to reach 5.3% and 5.8% at the end of this year. "So, inflationary pressures appear to be always present," said Rundheersing Bheenick. With regard to the range of measures available to determine the rate of inflation, the governor of the central bank has emphasized the need to refer to the rate of inflation 'year on year'. This is more reliable than the Headline Rate published by Statistics Mauritius, which does not necessarily take into account the recent dynamics, which are better captured by the 'year-on-year inflation rate.

Inflation is worrying in the 'middle income countries' trade partners of Mauritius, or developed countries, noted Rundheersing Bheenick. "There are very few countries that have a higher level of inflation at Mauritius. Among them, I quote from South Africa and Turkey, "he said.

Rundheersing Bheenick said that the situation is not as serious as it had a lower growth rate in 2009 was 3.1%. In 2007, when there was no crisis, the growth rate was 5.7%. "We do not think this is dramatic," said the Governor of the Bank of Mauritius. "Other countries are in a period of decline or stagnation. While we, in Mauritius, we acknowledge a growing year by year, "he said.

"Furthermore, we believe that some sectors will perform better than the previous year," the governor said. This is the case of the textile to be a growth of 1%, compared to a decline of 0.9% recorded last year. Ditto for the tourism sector where the number of arrivals will grow over the last year. This is also the case for the sector of 'seafood' acknowledge that growth this year.