Bloomberg News

Mauritius Rupee Drops for Second Day to Europe on Debt Concern

September 29, 2011

Sept. 29 (Bloomberg) -- Mauritius’s rupee declined for a second day against the euro as a delay in measures to resolve Europe’s sovereign-debt crisis curbed demand for assets from markets that depend on trade with the region.

The currency of the Indian Ocean island nation depreciated as much as 0.9 percent to 39.8549 per euro and traded 0.2 percent down at 39.5500by 1:58 p.m., in Port Louis, the capital. Versus the dollar, main currency of the nation’s imports bills, the rupee gained 0.2 percent to 28.95.

European confidence in the economic outlook dropped more than economists forecast in September to the lowest in almost two years, reflecting growing concern that the worsening debt crisis could push the euro-area economy into a recession. Greek government bonds rose as German lawmakers backed an expansion of the euro-area rescue fund. Greek Prime Minister George Papandreou holds a cabinet meeting to discuss the 2012 budget and reduction of spending.

“No one really knows where this debt-loaded Greek ship is heading, with the situation being made worse by the fact there seems to be several captains on board,” analysts from Mauritius Commercial Bank, the country’s largest lender by market value, said in an e-mailed note to clients today.

Europe is the country’s main trading partner, buying almost two-thirds of Mauritian manufactured goods, according to Statistic Mauritius. Sixty-two percent of tourists were from Europe in the eight months through August, data from the Mauritius Tourism Promotion Authority show.

Buying prices for the dollar ranged from 28.0483 to 28.2162 and the selling price declined to 29.5407 compared with 29.5948 yesterday, according to exchange rates published today on the Bank of Mauritius website.

--Editors: Ana Monteiro, Peter Branton

-0- Sep/29/2011 10:46 GMT

-0- Sep/29/2011 10:52 GMT

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 in Johannesburg at asguazzin@bloomberg.net


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