Le Matinal spoke to a logistics and supply chain professional based in the Port Area to understand the impact on trade of the June 28 intervention of the Bank of Mauritius’ on the domestic foreign exchange market. As a reminder, on Monday 28, the central bank issued a public notice to announce that it is selling $25 million at the rate of Rs. 42.50. This decision has had a major impact on valuation of the Mauritian Rupee, further weakening the local currency by 4%.
According to our source, who preferred to remain anonymous, on Tuesday, June 29, the shortage of US dollar on the domestic market became acute. “I know clients who have applied for Swift Transfers last week on agreed rates of Rs. 41. However, on Tuesday, they have been told that their bank could not proceed with the transfer because of a shortage of US dollar on the market”, he told us.
According to him, “importers footing bills now find themselves in a tight spot. The daily depreciation of the Mauritian Rupee from Rs. 43.20 to Rs. 43.30 in the span of two days call for caution. We are advising clients to wait and see. If the Rupee continues on this trend and loses another 20 cents by next Monday, this may disrupt trade. Many did not make provision for a sudden cross-border transaction costs increase of over a hundred thousand rupees. Given the current uncertainty, the volume of imports will fall significantly since importers will have to handle costs, insurance, freight charges and customs duty with less money in their pockets”.
While the US dollar was officially at Rs. 43.32, according to the Consolidated Indicative Exchange Rates of the Bank of Mauritius as at June 30, the new applicable rate ranged between Rs. 43.25 and Rs. 43.50. The higher businesses were willing to pay, the more in volume and the faster banks and money changers were willing to disburse.
Experts say that the deficit of foreign exchange domestic market amounts to around $145 million.
