2023-09-03 23:57:50
The money market in Mauritius is struggling to find its pre-pandemic balance. The historical interventions of the Central Bank to the tune of 3.8 billion dollars were not enough. Importers are still complaining regarding a lack of foreign currency. Rupee depreciation and other factors make the market unstable.
From our correspondent in Port-Louis,
Despite the repeated interventions of the Bank of Mauritius since the end of the pandemic and the economic recovery, Mauritian industrialists face a persistent problem of lack of foreign exchange. A historical importer, preferring to remain anonymous, confides to us: “ I continue to visit banks to obtain foreign currency. »
This reality intrigues the economist Rajiv Hasnah: We are rather perplexed by this situation of currency shortage which persists three years following the Covid, despite the quite considerable recovery of the tourism sector, the improvement in the textile sector since before the Covid, the stability of the financial sector and the continuous performance in the agricultural sector. »
What are the reasons for this imbalance in the currency market? For many analysts, the massive intervention of the Bank of Mauritius during the pandemic has something to do with it. The Central Bank has drawn more than 3 billion dollars (140 billion rupees) from its strategic reserves to support the Mauritian economy, which is the equivalent of 20% of the island’s gross domestic product.
“The currency market is dynamic”
At the same time, it has not stopped supplying the market with foreign currencies. ” Since the start of the pandemic, the Bank of Mauritius has sold regarding $3.8 billion in a bid to stabilize the foreign exchange market “, explains Waësh Khodabocus, Acting Director of the Financial Stability and Risk Management Department of the Bank of Mauritius.
When asked why importers are still complaining regarding a lack of foreign currency despite the intervention of the Bank of Mauritius, Waësh Khodabocus answers: “ The currency market is dynamic, fluctuations in currency volumes are quite normal. We will certainly intervene whenever foreign exchange market conditions require it.. »
Restoring Confidence in the Mauritian Rupee
This year, the Bank of Mauritius injected $60 million into the market and officially urged the 17 local banks not to add to the speculation.
Two other factors complicate the situation: the rupee has slipped by more than 30% in three years once morest the American currency and the interest rate is slightly lower than that of the dollar (4.5% once morest more than 5%). The Bank of Mauritius also indicates that the demand for foreign currency is strong at the moment, as importers build up their stocks at the end of the year.
For their part, economists call on the regulator to restore confidence in the Mauritian rupee.
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