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Sept. 30 (Bloomberg) -- Mauritius’s rupee headed for its largest quarterly drop in five against the dollar, as the debt crisis in Europe, the nation’s main market, raised concern about a global slowdown and curbed demand for riskier assets.
The currency declined as much as 0.7 percent to 29.2 per dollar and was little changed at 29.0 by 1:05 p.m., in Port Louis, the capital, taking its quarterly loss to 3.5 percent, the most since the three months through June 30 last year, according to data compiled by Bloomberg. Versus the euro, the rupee appreciated 0.8 percent to 39.2087.
German Chancellor Angela Merkel gained support from lawmakers to expand the European Financial Stability Facility’s firepower, raising the nation’s guarantees to 211 billion euros from 123 billion euros.
“The German vote to increase the size of their rescue fund did cheer up markets as it showed renewed commitment from the European union’s economic leadership to support ailing economies,” analysts at Mauritius Commercial Bank, the country’s largest lender by market value, wrote in an e-mailed research note today. “It remains highly unlikely that markets will be duped by this move as it does nothing to tackle the real issues facing the euro zone.”
Mauritius derives 41 percent of its foreign-currency earnings in euros, as Europe is the main source for tourism arrivals and largest buyer of the nation’s manufactured goods, data from Bank of Mauritius and Statistics Mauritius show. The Indian Ocean Island nation, with a population of 1.3 million people, is a net importer of food and fuels. The data agency has cut growth to 4.1 percent for 2011 from 4.5 percent in June, it said in a statement on its website.
Buying prices for the dollar ranged from 28.0918 to 28.2632 and the selling price increased to 29.5889 compared with 29.5948 yesterday, according to exchange rates published today on the Bank of Mauritius website.
--Editors: Ana Monteiro, Linda Shen
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To contact the reporter on this story: Kamlesh Bhuckory in Port Louis via Johannesburg at firstname.lastname@example.org
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