Page 7 - May 2017

1.5 per cent in April 2017 to 1.9 per cent in May 2017, while y-o-y inflation surged from 2.9 per
cent to 5.9 per cent. The main contributors to this rise in the index were vegetables (+0.9 index
point), other food products (+0.1 index point), alcoholic drinks (+0.1 index point) and clinic fees
(+0.1 index point). Between April 2017 and May 2017, for the twelve-month period, CORE1
inflation increased from 0.5 per cent to 0.7 per cent, while CORE2 inflation edged up from 1.9 per
cent to 2.0 per cent.

Both the annual growth rate of Broad Money Liabilities (BML) and bank credit to private
sector slowed in April 2017. Monetary expansion - measured by the year-on-year growth rate
of BML - dropped to 8.8 per cent in April 2017, from 9.6 per cent in March 2017. Except for time
deposits, all the components of BML maintained robust annual growth rates. Year-on-year growth
in bank credit, excluding GBCs, grew at 0.9 per cent in April 2017 compared to a growth of 1.0 per
cent in the previous month.

Auctions of Government of Mauritius securities were largely oversubscribed, thereby
resulting in a drop in their yields. Government of Mauritius Treasury Bills (GMTBs) for a total
nominal amount of Rs3.2 billion were issued for tenors of 182-Day and 364-Day. The GMTB
auctions were oversubscribed, with bids received totalling a nominal amount of Rs9.1 billion and
bid-cover ratios in the range of 2.56-3.64 compared to 1.23-2.78 for April 2017. Over the same
period, maturing GMTBs amounted to Rs5,538 million. The weighted average yields on the 91-
Day, 182-Day and 364-Day dropped by 35 basis points (bps), 65 bps and 54 bps, respectively. The
overall weighted yield decreased by 52 bps, from 2.75 per cent in April 2017 to 2.23 per cent in
May 2017. The 2.90% Benchmark Three-Year Treasury Notes maturing 17 February 2020 was re-
opened for a nominal amount of Rs2.0 billion and bids received totalled to Rs5.8 billion. The
weighted yield stood at 3.17 per cent, representing a decline of 48 bps compared to the auction
held in April 2017.

Government started buyback operations since January 2017 with a view to effectively
manage its cash flow. On 23 May 2017, a reverse auction was conducted for the buy-back of
3.88% Three-Year Government of Mauritius Treasury Notes maturing on 25 July 2017. A total
nominal amount of Rs0.4 billion was repurchased in the Three-Year Treasury Notes.

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