IMF Staff Country Reports

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. Mauritius has made substantial progress in modernizing its monetary policy framework through reforms that have strengthened policy implementation, enhanced analytical capacity with a modern Forecasting and Policy Analysis System, and improved central bank communication. However, incomplete implementation of the operational framework continues to weaken monetary policy transmission, while external communication could better incorporate forward-looking analytical assessments. International experience suggests that effective inflation targeting requires a communication strategy closely aligned with the policy framework, supported by predictable communication cycles, consistent messaging, clear audience segmentation, and regular evaluation of communication effectiveness. Further strengthening these elements would improve the signaling role of the policy interest rate, enhance the transmission of monetary policy, and anchor inflation expectations more firmly. Better integration of analytical, operational, and communication frameworks would reinforce the credibility and effectiveness of Mauritius’s inflation-targeting regime, enabling monetary policy to achieve its price stability objective more effectively while supporting macroeconomic resilience in an increasingly uncertain global environment.