Oct. 11 (Bloomberg) -- Mauritius’s rupee appreciated the most in more than two weeks against the dollar after Europe pledged to support the biggest banks, increasing demand for high-yielding emerging- and frontier-market assets.
The Indian Ocean island nation’s currency advanced as much as 1 percent to 28.95 per dollar, the most since Sept. 28, and traded 0.7 percent higher at 29.05 by 12:07 p.m. in Port Louis, the capital, according to data compiled by Bloomberg. A close at this level would be its highest since Oct. 3. Versus the euro, the currency of its main trading partner, the rupee appreciated 1.1 percent to 39.5283.
German Chancellor Angela Merkel and French President Nicholas Sarkozy on Oct. 9 set an end-of-month deadline to deliver a plan to recapitalize Europe’s banks and address Greece’s debt crisis. France and Belgium agreed to break up Dexia SA, with the Belgian federal government paying 4 billion euros ($5.5 billion) for the consumer-lending unit.
“The European Union leaders have been able to buy two more weeks from the markets to set their house in order,” analysts at Mauritius Commercial Bank, the country’s largest lender by market value, said in an e-mailed note to clients today. “It is hoped that the outcome will live up to expectations.”
Mauritius, an open economy with a population of 1.3 million people, is a net buyer of food and fuels, with 67 percent of import bills denominated in dollars. Europe is the country’s main source of tourist arrivals and largest buyer of manufactured goods, according to Statistics Mauritius.
Buying prices for the dollar ranged from 28.101 to 28.2681 and the selling prices declined to 29.6091 compared with 29.7097 yesterday, according to exchange rates published today on the Bank of Mauritius website.
--Editors: Linda Shen, Peter Branton
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