Central Bank of Mauritania considers tightening monetary policy

The Monetary Policy Council of the Central Bank of Mauritania has indicated a need to tighten monetary conditions due to accelerating inflation, which reached 9.3 percent in September. The Council noted that the current key interest rate of 6.75 percent results in a negative real interest rate of approximately 2.5 percent, a situation that, combined with excess banking liquidity, could weaken the effectiveness of monetary policy and fuel secondary inflationary pressures.

Inflationary drivers have included food products, which contributed roughly 6.8 percentage points to the rate. While the Council acknowledged that tightening policy will not directly address supply-side shocks, it aims to prevent these shocks from spreading throughout the broader economy.

Banking liquidity remains high, with free reserves reaching 4.35 billion ouguiya as of late October, significantly exceeding the daily target of 1 billion ouguiya. In response, the bank has intensified liquidity withdrawal operations. Regarding economic outlook, the Council projects Mauritanian economic growth to rise to 5.2 percent in 2026, up from 3.6 percent in 2025, supported by investment and non-extractive sectors.