The central bank's new monetary policy framework aims to reduce the high inflation rate of 12.2% year-on-year. Further increases in commercial bank interest rates are expected.

Inflation will be brought down to a rate varying between 2 and 5%. Through its new monetary policy framework, the central bank is sharpening its weapons in order to achieve its goal within a window of 12 to 24 months. Indeed, under this new framework, the Banque de Maurice (BoM) system will absorb excess liquidity, mainly through 7-Day BoM Bills issued at the key rate! by 4.5% and the overnight interbank rate. Thus, commercial banks will be able to send their excess cash to the central bank every late afternoon and on Fridays with the issuance of 7-Day BoM Bills.

Commercial banks will be paid at a higher rate and will have to pass these gains on to their customers by increasing the interest rate on savings deposits, through these operations. For its part, the Prime Lending Rate (PLR) is expected to increase, impacting corporate and individual borrowers. Thus, the devises Foreign Cash Reserve Ratio (CRR) is increased from 6% to 9%; a monetary instrument that is just as important in controlling inflation.