The Central Bank of Mauritania's Monetary Policy Committee reported that the country's inflation rate rose to 9.3% in September, up from 8.5% in July and 8.9% in August. Food prices contributed significantly to this increase, accounting for 6.8 percentage points of the overall rate. This upward trend in inflation has been a concern for the central bank, which has taken steps to address it.
The committee also noted that excess liquidity in the banking system had reached 4.35 billion ouguiyas, more than four times the daily target of 1 billion ouguiyas. This surplus liquidity, combined with the high inflation rate, led the committee to decide to tighten monetary policy. The bank's main interest rate was raised to 7.25%, and the required reserve ratio for commercial banks was increased from 8% to 15%.
The central bank's decision aims to curb inflationary pressures and stabilize the economy. According to the committee's minutes, the bank's main interest rate, previously at 6.75%, now has a negative real interest rate of around 2.5%. The bank has also intensified its liquidity withdrawal operations, with 17 billion ouguiyas in open market operations, including 12 billion ouguiyas in central bank certificates.
The Monetary Policy Committee acknowledged that the tightening measures will not directly address supply-side shocks but are necessary to contain inflationary pressures. The committee expects economic growth to reach 5.2% in 2026, up from 3.6% in 2025, despite a decline in iron and gold production in the third quarter.
The central bank's actions are aimed at maintaining economic stability and controlling inflation. The bank's governor has not yet commented on the minutes of the committee's meeting. The country's economic growth is expected to be influenced by various factors, including the performance of the mining sector.
The Mauritanian economy has faced challenges, including fluctuations in commodity prices and production levels. The central bank's tightening measures are intended to mitigate these risks and promote economic stability. The country's inflation rate and economic growth will be closely watched by policymakers and analysts in the coming months.
The central bank's decision to tighten monetary policy reflects its commitment to maintaining economic stability and controlling inflation. The bank will continue to monitor economic developments and adjust its policies as needed to achieve its objectives.
Key points
- Mauritania's inflation rate reached 9.3% in September, driven by food prices.
- The central bank tightened monetary policy to address inflationary pressures and excess liquidity.
- Economic growth is expected to reach 5.2% in 2026, despite challenges in the mining sector.
