Mauritius Central Bank Governor threatens local banks of ‘unpatriotic speculations’

The Governor of the Bank of Mauritius, Harvesh Seegolam, has pledged to defend the Rupee against what he called as “unhealthy” and “unpatriotic” speculations of certain banks that are causing the currency to weaken.

The Bank of Mauritius plans to continue intervening in the foreign-exchange market to support the rupee, after acting twice in the past week to help strengthen the currency, Seegolam told reporters on Friday.

“Enough is enough. I say stop to these unpatriotic anticipations of those who hold currencies and who push the rupee to depreciate and increase prices for Mauritians. “At the end of the day, it is Mauritians who pay the price for these selfish actions.”

The BoM intervened in the foreign exchange market at Rs 46 for a dollar and, if is necessary, it will intervene massively, “since the Central Bank has the means – it has a Special Reserve Fund nearing Rs 9 billion”.

“If commercial banks do not play the game, the BoM will change the rules of the game by adding new ones, in particular by remunerating depositors directly with the issue of two one-year and two-year bonds at a yield of 4.60% and 4.75% respectively, as from 3 April.”

Governor Seegolam also warned of “actions and other sanctions”, if necessary, against institutions “that are participating in the distortion of the market”.

The Governor forecasts inflation rate to come down to 6% in 2023. His objective, he said, is to bring this rate below 5% in 2024.

Sources: Le Mauricien, Defi Media