Gross international reserves rise, but foreign exchange market still faces challenges

The country’s official gross international reserves (GIR) have increased from Rs 294 billion to Rs 297.2 billion over the past year.

Tourist arrivals between January and October 2023 reached 1,026,771, compared to 1,102,660 in 2019.

Tourist receipts for January to September 2023 totalled Rs 60.79 billion, a 46% increase compared to the same period in 2022.

However, despite these improvements, the foreign exchange market does not reflect the increase in foreign currency inflows.

Suren Surat, CEO of SKC Surat, confirms that there is still a shortage of currencies and obtaining them remains a challenge.

SKC Surat makes weekly requests to banks for the necessary currencies to settle import bills.

This situation creates frustrations for businesses, as bills are not always settled promptly.

A former Governor of the Bank of Mauritius explains that this problem stems from a mismatch between foreign exchange receipts and the cashing in of funds by banks.

The demand for currencies exceeds the supply, as evidenced by the deficit in the balance of payments.

Source: Defi Media