July 22 (Bloomberg) -- Mauritius’s rupee strengthened the most in three weeks as the new agreement on Europe’s debt crisis eases pressure on the country’s euro-centric exporters.
The currency appreciated 2 percent to 28.0750 per dollar by 6 p.m. in Port Louis, the biggest jump since June 30 on a closing basis and bringing the week’s increase to 1.2 percent. Against the euro, the rupee strengthened 1.1 percent to 40.7238.
Euro-area leaders eased the terms for loans for cash- strapped nations yesterday and empowered a 440 billion-euro ($631 billion) rescue fund to buy debt across financially stressed nations, protecting Spain and Italy.
“The rupee has the influenced by the euro-dollar seesaw on the international front,” said Fabien Gebert, treasurer at GML, which says it is the country’s biggest company by assets and revenue, in a phone interview today. “The new bailout might be of comfort for our exporters who are mostly euro-centric.”
Mauritius, with a population of 1.3 million, derives 41 percent of its revenue in euros, according to Bank of Mauritius data, as Europe is the main buyer of exports and accounts for almost two-thirds of arriving tourists.
“The trend is yet to be confirmed next week with more activity on the local front, as companies should proceed with foreign-currency conversions to meet with their end of month obligations such as import bills and wages,” Gebert said.
The buying price for the dollar was 27.3748 rupees to 27.5329 rupees with a selling price of 28.8252 rupees per dollar, according to indicative rates on the Bank of Mauritius’s website,
Mauritian stocks snapped four days of declines, advancing 0.2 percent to 2,048.19 at the 1:30 p.m. close of trading.
--Editors: Linda Shen, Peter Branton
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