The Governor of the Bank of Mauritius told Bloomberg, before the MPC meeting, that inflation may hit 5 per cent because of the Iran war raising the cost of imported goods. The MPC statement of 20 May 2026 confirmed that imported inflation, driven by higher energy prices and elevated freight and logistics costs, is the primary pressure. On the same day Forum Sitwayin describes this as preventive action, IEA Executive Director Fatih Birol told Channel 4 News that 11 million barrels per day have been removed from global oil markets by the Hormuz closure. A preventive action addresses a domestic problem before it develops. The problem the Governor named is external, imported and driven by a war Mauritius did not start. Raising rates against imported supply-side inflation is not prevention. It is the wrong tool applied to the wrong cause and described in preventive language.

Moody's scrutinises Mauritius's debt sustainability because Mauritius borrows in dollars at rates it does not control, holds reserves it must defend and runs a current account deficit it must finance. Moody's does not apply equivalent scrutiny to Japan at 260 per cent debt-to-GDP, to the United States at $36 trillion in national debt or to France at 110 per cent of GDP. The reason is that those countries issue their own currencies, borrow in their own currencies and set their own monetary policy independently of any external creditor's assessment. Mauritius does not. Moody's oversight of Mauritius is not evidence of BoM independence. It is evidence of the dollar dependency and structural monetary vulnerability that The Meridian has documented throughout this edition. Presenting Moody's scrutiny as a badge of independence is analytically backwards. It is the scrutiny that proves the constraint.

This is the central claim of the article, bolded by its own author as the decisive argument. The Meridian addresses it precisely. Yes, interest rates are technically the price of money in monetary economics. And the price of money directly determines the monthly repayment on every variable rate mortgage in Mauritius. A Mauritian household with a Rs3 million home loan at a variable rate linked to the key rate sees their monthly repayment rise immediately when the key rate rises. That household does not care whether economists classify their higher monthly payment as the price of money or the price of a consumer product. Their disposable income fell. Their purchasing power fell. Calling the mechanism the price of money rather than the cost of living does not change the financial reality of the household paying Rs400 to Rs600 more per month. Furthermore, the Bank for International Settlements, the IMF and every major central bank in the world explicitly describe interest rate transmission as operating through the cost of credit to households and businesses, raising the cost of mortgages, consumer loans and business financing. This is the standard transmission mechanism. Forum Sitwayin is using a definitional distinction to deny a mechanism that the central banking community it cites as its authority describes as the primary channel of monetary policy. That is not monetary economics. It is sophistry.

Mauritius is not suffering from overconsumption. The Governor of the Bank of Mauritius told Bloomberg the inflation is from the Iran war and imported energy costs. The IMF Article IV mission concluded on 4 May 2026 confirmed that inflation is expected to increase in 2026 due to higher international fuel and food prices. The IEA confirmed today that 11 million barrels per day have been removed from global markets by the Hormuz closure. Household overconsumption is not the cause of Mauritius's inflation in May 2026. Telling Mauritians they are living above their means when the IEA is warning of a global oil red zone by end of June is not economic analysis. It is moral lecturing dressed in monetary theory. Furthermore, the suggestion that higher rates are needed to stop rupee depreciation ignores the debt spiral The Meridian documented in The Middle Class Bill: higher rates raise debt servicing costs on Rs642 billion in public debt, widen the fiscal deficit, pressure the credit rating, contract private investment and slow growth, which makes the debt-to-GDP ratio worse, which places further downward pressure on the rupee. The medicine Forum Sitwayin is prescribing accelerates the disease it claims to treat.

The monetary base grew 12.2 per cent. The credit grew 8.7 per cent. These numbers are selected from the same dataset that also contains youth unemployment at 16.61 per cent, a fiscal deficit of 9.8 per cent of GDP, public debt at Rs642 billion and 90 per cent of GDP, a water reservoir at 51 per cent capacity, a Price Stabilisation Account Rs3.2 billion in deficit and GDP growth decelerating to 2.5 per cent. Selecting one number from a dataset to demonstrate health while ignoring all the other numbers in the same dataset is not analysis. It is selective presentation. The Meridian asks further: where did the 12.2 per cent monetary base growth go? If commercial banks are expanding credit while simultaneously expanding into African markets, including MCB's expansion to Kenya and IBL's operations in Morocco, the domestic credit growth is not building productive domestic capacity. It is partly financing the extraction model The Meridian has documented throughout this edition. Credit growth in an import-dependent economy with a 9.8 per cent fiscal deficit does not indicate health. It indicates that the government is borrowing from the banking system to cover its fiscal shortfall, which is exactly what the broad money expansion reflects. This is the same Rs83 billion that Forum Sitwayin previously described as purely commercial bank credit creation. The monetary base has since grown a further 12.2 per cent. Forum Sitwayin now cites this growth as evidence of health. The Meridian notes the evolution with interest.