The Central Bank of Mauritania has increased its benchmark interest rate by 50 basis points to 7.25% and raised the reserve requirement for banks to 15% from 8%. This move aims to combat accelerating inflation, which reached 9.3% in September 2026. The bank's Monetary Policy Council announced these decisions after its meeting, citing the need to contain inflationary pressures and anchor price stability expectations.
The interest rate hike and increased reserve requirement are part of a monetary policy tightening effort. The council noted that the real interest rate, calculated based on recorded inflation, remains negative. The higher reserve requirement is expected to immobilize approximately 10.19 billion ouguiyas in funds at banks, increasing from 11.64 billion ouguiyas to around 21.83 billion ouguiyas, assuming stable deposits.
The council justified the policy tightening by citing the acceleration of inflation to 9.3% in September, exceeding its previous forecast of 8.2%. Inflation is spreading to sectors beyond fresh products and energy, and the council warned that inflation risks are increasing due to potential rises in energy and food import costs. The forecasts were based on assumptions of declining international prices and no fuel price adjustments.
The council decided to implement these decisions gradually, evaluating their combined impact on the monetary situation at its next meeting. It will continue to monitor inflation, credit, financing conditions, and exchange rates, updating forecasts based on international price developments. The bank aims to strengthen its monetary policy tools, including open market operations and the interbank foreign exchange market.
To enhance its policy toolkit, the council called for adjustments to open market operations, development of the interbank foreign exchange market, and implementation of tools to hedge against currency fluctuation risks. It also recommended improving data collection, monitoring, and quality control, as well as developing forecasting and economic analysis tools.
The Central Bank of Mauritania reaffirmed its commitment to price stability and taking necessary measures to preserve inflation expectations, financial stability, and confidence in the national currency. The bank will continue to assess the impact of its policy decisions and make adjustments as needed to achieve its objectives.
The policy tightening reflects the central bank's proactive approach to addressing rising inflationary pressures in Mauritania. The bank's actions aim to stabilize prices, maintain financial stability, and support sustainable economic growth. The effectiveness of these measures will depend on various factors, including the evolution of inflation and the response of economic agents.
Key points
- Mauritania's central bank raises interest rate to 7.25% and reserve requirement to 15% to combat inflation.
- Inflation in Mauritania reached 9.3% in September 2026, exceeding previous forecasts.
- The central bank aims to strengthen its monetary policy tools to achieve price stability and financial stability.
