PORT LOUIS: Year-on-year inflation in Mauritius rose to 7.0 percent in November from 6.0 percent a month earlier and the central bank warned of more minor interest rate moves to combat it after a small rate cut on Monday.
The annual average inflation rate increased for the 17th month in a row, data showed on Tuesday, hitting 6.6 percent in November versus 6.4 percent the previous month.
The November figures came a day after the central bank cut 10 basis points off its key interest rate, saying externally-generated inflationary pressures were on the decline and the growth outlook was clouded by global economic uncertainty.
The Central Statistics Office (CSO) said the consumer price index rose 1.7 percent in November from October, driven chiefly by increases in the price of alcoholic drinks and cigarettes, which together posted a 15.9 percent month-on-month jump.
The rise in year-on-year inflation was the first since July. The CSO does not publish the rate in its inflation release and the increase is based on the index numbers of 130.4 in November 2011 and 121.9 in the same month a year earlier.
Bank of Mauritius Governor Rundheersing Bheenick told reporters on Tuesday that the bank only trimmed its key repo rate to 5.4 percent a day earlier because a bigger cut could have spurred inflation on the Indian Ocean island.
"The comfort zone for inflation would be of 4 to 6 percent," Bheenick said. "A drastic rate cut could have reignited inflation ... the rate cut is a clear signal that we will proceed with minor adjustments in future."
The central bank also said in a statement on Monday explaining the cut that while the repo rate was broadly appropriate it was concerned about low levels of business and consumer confidence.
In a Reuters poll, six analysts predicted no change in the repo rate while five forecast a 25 basis-point cut.
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