July 29 (Bloomberg) -- Mauritius’s rupee declined, paring its first monthly increase in three, as concern that the U.S. and Europe will struggle to contain their debt crises curbed demand for riskier frontier-market assets.
The currency weakened for a second day, depreciating 0.4 percent to 28.00 per dollar at 12:11 p.m. in Port Louis, the capital. That pared its monthly gain to 2.8 percent. Versus the euro, the rupee retreated 0.6 percent to 40.1723. The currency closely tracks the euro’s movements against the dollar, with an average correlation of 0.88 this month. A value of 1 would mean they move in lock step.
U.S. lawmakers delayed a vote on a plan to raise the debt limit to avert a default and Moody’s Investors Service said it may cut Spain’s credit rating.
Today’s decline follows the trend of emerging-market currencies suffering from “lower risk appetite throughout markets,” analysts at Mauritius Commercial Bank, the country’s largest lender by market value, wrote in an e-mailed note to clients today. “Markets remain worried about the situation in the U.S.”
Buying prices for the dollar ranged from 27.2043 rupees to 27.3733 rupees, with a selling price of 28.6709 rupees per dollar, according to indicative rates on Bank of Mauritius’s website.
--Editors: Ana Monteiro, Linda Shen
-0- Jul/29/2011 10:29 GMT
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