Bloomberg News

Mauritius Central Bank Buys Foreign Currency for Stability

June 27, 2011

(Updates with comments by central bank governor in the third paragraph.)

June 27 (Bloomberg) -- Mauritius’s central bank purchased more foreign currency last week than at any time in the past year to ensure stability in the market, Bank of Mauritius Governor Rundheersing Bheenick said.

The Port Louis-based central bank bought $40.4 million, 4.43 million euros ($6.3 million) and 1 million pounds ($1.6 million), it said on its website on June 24.

“We are trying to mop up all excess forex that could destabilize the domestic market and create unnecessary volatility,” Bheenick said in a phone interview on June 24 from Basel, Switzerland, where he was attending a meeting of the Governing Board of the International Islamic Liquidity Management Corp.

The rupee has weakened by 2.1 percent against the dollar since June 1, paring its gains since the beginning of the year to 7.5 percent, according to Bloomberg data. It was trading at 28.55 rupees at 10:58 a.m. in Port Louis.

The Indian Ocean island nation, with a population of 1.28 million people, is a net importer of food and fuels.

Annual inflation accelerated to 7.1 percent in May from 7 percent in April, the Central Statistics Office said on June 7. The central bank raised its benchmark interest rate by 25 basis points, or quarter of a percentage point, to 5.5 percent on June 13 to rein in inflation running at its fastest pace in more than two years.

--Editors: Philip Sanders, Karl Maier

To contact the reporter on this story: Kamlesh Bhuckory in Port Louis via Johannesburg at gbell16@bloomberg.net.

To contact the editor responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net.


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