Modernizing Monetary Policy in Mauritius: Implementation, Analytics, and Communication at the Bank of Mauritius

Since the adoption of an explicit inflation-targeting regime in 2023, Mauritius has made notable progress in modernizing its monetary policy framework. Reforms have strengthened the design of monetary policy implementation, enhanced analytical capacity through a modern Forecasting and Policy Analysis System (FPAS), and improved central bank communication. At the same time, incomplete implementation of the operational framework—particularly persistent excess liquidity that generates deviations between the announced policy rate and the effective stance—has constrained monetary transmission, while forward-looking analytical insights need to be enhanced in external communication. This Selected Issues Paper reviews recent achievements and highlights that stronger alignment between implementation, analytics, and communication would enhance policy effectiveness, further anchor inflation expectations, and reinforce the credibility of monetary policy in Mauritius.