Mauritian Households Amass Record $1.9 Billion Cushion As Rupee Volatility Looms

Mauritian households are increasingly turning their backs on the local rupee in favour of foreign denominations, as a significant shift in saving habits takes hold across the island. New data from the Bank of Mauritius reveals that the proportion of foreign currency held in household accounts has surged from 9.5% to 15.4% in just six years.

Driven by a desire for stability and a hedge against potential depreciation, this steady accumulation has seen total foreign currency deposits swell to a substantial $1.9 billion (approximately MUR 87.8 billion).

As families seek to safeguard their prosperity, the trend underscores a growing appetite for “hard” currencies in an increasingly volatile global landscape.

Households continue to strengthen their foreign currency deposits

• 15.4%: The share of foreign currency deposits in total household deposits significantly increased over the last six years, rising from 9.5% in June 2019 to 15.4% in June 2025.
• 20.9%: Between 2019 and 2025, household foreign currency deposits grew at an annual rate of 20.9%, reaching $1.9 billion in June 2025.

$103.2 million

Parallelly, foreign currency purchases by households remained globally stable compared to the previous semester, totaling $103.2 million in the first half of 2025.

The increase in foreign currency deposits, estimated at $300 million, indicates that their growth was funded by sources other than just domestic exchange market purchases, notably through the repatriation of foreign currency deposits.

“Household appetite for foreign currency remains sustained.

Foreign currency deposits progressed steadily in the first half of 2025, reflecting households’ desire to preserve a portion of their wealth and protect themselves against exchange rate risks.

This dynamic is fueled by lasting expectations of currency depreciation; foreign currency deposits have shown an average annual growth of 20.9% since June 2019.

However, the exchange rate did not depreciate against the dollar in accordance with these expectations, even if episodes of volatility were observed.”

Strong Corporate Demand for Foreign Currency Credit

Corporate credit denominated in foreign currency strengthened in the first half of 2025, despite a temporary slowdown observed in May.

In June 2025, this type of credit showed an annual growth of 8.7%, reflecting sustained demand from companies. This demand primarily came from sectors such as manufacturing, trade, and agriculture.

“The ability of import-oriented companies to access foreign currency financing demonstrates the proper functioning of the foreign currency credit market, a key element for supporting macro-financial stability,” indicates the Bank of Mauritius.

Other Information:

• The loan-to-deposit ratio in foreign currencies for the “corporate sector” remained high but close to 100% in the first half of 2025.
• In June 2025, this ratio stood at 104.4%, reflecting sustained demand for foreign currency credit, particularly from export-oriented companies.
• This high level also indicates that banks largely finance these foreign currency exposures using foreign currency deposits mobilized from the corporate segment, providing a certain “natural hedge.”
• This alignment between foreign currency assets and liabilities helps mitigate the risk of monetary imbalance and strengthens balance sheet resilience, emphasizes the Bank of Mauritius.

Note: Based on current exchange rates, $1.9 billion is approximately MUR 87.8 billion.

Source: Defi Media