On March 28th the Bank of Mauritius (BoM, the central bank) raised the repurchase (repo) rate from 4.75% to 5.25%, the first increase since July 2008. Despite rising inflation, the bank had previously hesitated to increase rates because of the likely impact on growth. However, national accounts data suggested that economic growth was better established: real GDP growth in the year to September 2010 was 5.4%, compared with 2.8% in the year to June. The main risk to the economy was now inflation: rising world commodity prices had pushed year-on-year consumer price inflation to 6.8% in February, and it would go on rising (inflation averaged 7% in March and April). The bank's monetary policy committee judged that the time was right "to anchor inflation expectations and prevent the recent rise in consumer price inflation from second-round effects"; another important consideration was the maintenance of positive real interest rates. We expect interest rates to follow the global trend and be raised by another 50 basis points in 2012.