Bloomberg News

Mauritius Rupee Drops for Second Day on European Debt Concern

October 04, 2011

Oct. 4 (Bloomberg) -- Mauritius’s rupee depreciated for a second day against the dollar on concern Europe’s debt crisis will worsen, curbing demand for riskier frontier-market assets.

The currency of the Indian Ocean island nation declined 1.7 percent to 29.50 per dollar by 11:47 a.m. in Port Louis, the capital. A close at this level would be the weakest since Feb. 25, according to data compiled by Bloomberg. Versus the euro, the currency of its main trading partner, the rupee snapped two days of gains, depreciating 1.3 percent to 38.9849. The rupee lost 1.5 percent to 45.5694 per pound, the currency of Mauritius’s largest buyer of manufactured goods.

European finance ministers have postponed a decision to release Greece’s next loan installment until after Oct. 13. The vote was originally scheduled for yesterday, as part of the 110 billion-euro ($145 billion) lifeline given to Greece last year. The finance chiefs are considering “technical revisions” to a July deal for a second Greek aid package, Luxembourg Prime Minister Jean-Claude Juncker said today.

“Markets have gone awry very rapidly as details emerge about the Greek situation,” analysts at Mauritius Commercial Bank, the country’s largest lender by market value, wrote in an e-mailed note to clients. “As Greece misses its budget-deficit target, global markets are skittish.”

Mauritius, an open economy with a population of 1.3 million people, derives 41 percent of its foreign-currency income in euros, Bank of Mauritius data show. Visitors from Europe accounted for 62 percent arrivals from January to August. The U.K is the largest buyer of its exports by nation, with a share of 22 percent for the six months through June, according to Statistics Mauritius. The island nation is a net buyer of food and fuels, with 67 percent of its import bills in dollars.

Buying prices for the dollar ranged from 28.3848 to 28.5549 and the selling price rose to 29.8902 compared with 29.7468 yesterday, according to exchange rates published today on the Bank of Mauritius website.

--Editors: Ana Monteiro, Peter Branton

-0- Oct/04/2011 07:52 GMT

-0- Oct/04/2011 08:02 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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