By Garth Theunissen -- Feb. 16 (Bloomberg)
The Mauritian rupee slumped the most in three weeks as a decline in tourism revenue and lower textile exports drove up demand for dollars in the Indian Ocean island nation, according to Standard Bank Group Ltd.
“The currency is depreciating in response to massive demand for dollars from within Mauritius,” David Morgan, a currency trader on Standard Bank’s Africa desk in Johannesburg, said in a telephone interview today. “The tourism and textile industries aren’t bringing in the foreign currency that they used to so everyone is looking for dollars at the moment.”
The rupee weakened as much as 2.9 percent to 33.8250, the steepest decline since Jan. 26, and traded at 33.5500 as of 7:49 p.m. local time. The drop extended the rupee’s decline this year to 5.4 percent.
Economic growth in Mauritius will slow to 4 percent or less this year as the first simultaneous recession in the U.S., Japan and European countries sharing the euro since World War II crimps the nation’s earnings from tourism and textiles, the International Monetary Fund said on Jan. 6. Mauritius, located about 500 miles (805 kilometers) off the east coast of Madagascar, earns most of its foreign currency from tourism and the export of sugar, clothing and textiles.
The economy probably grew 5.2 percent in 2008, less than an earlier government forecast of 5.6 percent, the statistics office said on Jan. 2. Tourist arrivals dropped 6.1 percent in December, the Tourism Ministry said on Jan. 27.