Bloomberg News

Mauritius Rupee Heads for Week-Low on France Rating Pressure

October 19, 2011

Oct. 19 (Bloomberg) -- Mauritius’s rupee fell to the lowest in a week against the dollar on concern that the top credit rating of France, its main Eurozone trading partner, is at risk. Stocks declined.

The currency of the Indian Ocean island nation depreciated as much as 0.4 percent to 29.05 per dollar, its lowest level on a closing basis since Oct. 13, and traded 0.2 percent down to 29.00 per by 2:43 p.m. in Port Louis, the capital, according to data compiled by Bloomberg. Versus the euro, the rupee retreated 0.9 percent to 40.1327. The 38-member SEMDEX index of stocks fell the most in two weeks, losing 0.2 percent to close at 1,886.77. Mauritius Commercial Bank, the largest lender by market value, led the retreat.

France’s Aaa credit rating is under pressure following debt deterioration and the potential for additional liabilities from Europe’s debt crisis, Moody’s said on Oct. 17, adding that the nation’s financial strength has weakened.

A cut “would seriously undermine the country’s finances, and put a blow to the European Financial Stability Facility, which France is part of,” analysts at Mauritius Commercial Bank wrote in an e-mailed note to clients today.

Europe’s second-biggest economy is the Indian Ocean island nation’s main source of tourists, making up 31 percent of visitors for the eight months through August, data from the Mauritius Tourism Promotion Authority show. The country bought 5.02 billion rupees ($173.1 million), or 25 percent of total exports to Europe in the six months through June, according to Statistics Mauritius. France invested 595 million rupees in the nation in the half year through June, or 18 percent of all foreign direct investment, the Bank of Mauritius said.

Buying prices for the dollar ranged 28.0217 rupees to 28.1905 and the selling price declined to 29.5282 compared with 29.5353 on Oct. 18, according to exchange rates published today on the Bank of Mauritius website.

--Editors: Ana Monteiro, Peter Branton

-0- Oct/19/2011 10:49 GMT

-0- Oct/19/2011 11:09 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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