Bloomberg News

Mauritius Rupee Weakens on Concern About European Debt Talks

October 25, 2011

Oct. 25 (Bloomberg) -- Mauritius’s rupee depreciated against the dollar as banks in Europe, the island’s biggest trading partner, clashed with the region’s politicians on the size of losses they will accept on Greek bonds, reducing chances of an agreement at a debt summit tomorrow.

The Indian Ocean island nation’s currency weakened 0.4 percent to 29.00 per dollar by 1:24 p.m. in Port Louis, the capital, trimming its gain in 2011 to 6.5 percent this year, according to data compiled by Bloomberg. The currency is Africa’s third-best performer against the dollar this year. Versus the euro, the rupee lost 0.7 percent to 40.4093.

Leaders of the 17-member eurozone are meeting for the second time in four days in Brussels tomorrow. Officials are seeking an agreement on bolstering the region’s rescue fund, recapitalizing banks and providing debt relief to Greece to avoid contagion spreading to Italy and Spain.

“The current crises are deeper than could be assumed --the European Union banks’ access to wholesale funding has completely dried up during the third quarter,” analysts at Mauritius Commercial Bank, the nation’s largest lender by market value, wrote in an e-mailed note. “The situation is clearly unsustainable and the European Central Bank, together with EU leaders, should work towards restoring confidence this sector before attempting to tackle bigger issues.”

Europe accounted for 62 percent of the country’s tourism arrivals in the eight months through August, according to the Mauritius Tourism Promotion Authority. France, Europe’s second- biggest economy, is the largest euro-area buyer of Mauritian exports, data from Statistics Mauritius show.

Buying prices for the dollar ranged from 27.9578 rupees to 28.1231 and the selling price declined to 29.4657 compared with 29.4944 on Oct. 24, according to exchange rates published today on the Bank of Mauritius website.

--Editors: Ana Monteiro, Wojciech Moskwa

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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