Mauritian Rupee Slides 0.9% Against Dollar, Reversing Mid-Year Gains

The local currency recorded a 0.9% depreciation against the dollar between August 13 and November 10, 2025, according to data, while at the same time gaining 1.7% against the pound sterling and 0.1% against the euro. This volatility follows a brief period of appreciation observed during the middle of the year.

Market Activity and Central Bank Intervention

The shift in the exchange rate is influenced by capital flows and central bank actions.

• Market Turnover: The national foreign exchange market recorded a total turnover of $3.4 billion during the period under review. This figure represents a $296 million increase compared to the same timeframe in 2024.
  • This turnover consisted of $1.6 billion in inflows and $1.8 billion in outflows.
  • Inflows were primarily concentrated in the financial and accommodation sectors, while outflows were mainly attributed to wholesale and retail trade.
• BoM Interventions: The Bank of Mauritius (BoM) has continued to intervene to stabilise the market, particularly targeting essential goods importers and small and medium-sized enterprises (SMEs).
  • Year-to-date, the BoM’s foreign exchange market interventions totalled $190 million, down from $335 million during the same period in 2024.
  • These operations included a recent $100 million sale following the latest Monetary Policy Committee meeting.

Governor Cites Supply-Demand Dynamics

BoM Governor Priscilla Muthoora Thakoor explained that the exchange rate is a reflection of several factors, including supply-and-demand conditions and movements of major international currencies.

“We observed strong demand for foreign currencies in the first half of the year, particularly in June, and the Bank intervened at that time. We are currently seeing a slight recovery as the end of the year approaches and imports increase,” she stated.

The Governor also highlighted the impact of the US Federal Reserve’s decisions on the local market. A US rate cut in October shifted the balance between the dollar and the rupee, and the next Fed decision remains uncertain.

“The gap between the dollar’s interest rate and the rupee’s is a decisive factor. Currently, the positive interest rate tends to limit further depreciation,” she added.

Floating Rate Regime and Outlook

Dan Maraye, former BoM Governor, pointed out that the rupee operates under a floating exchange rate regime.

• “We do not have a fixed rate, unlike some countries with significant reserves. Fluctuations are therefore natural,” he explained.
• He believes a level of depreciation remains acceptable as long as it stays within the central bank’s defined range.
• Regarding the impact on inflation, Maraye noted that most goods for the festive season have already been imported.

International Factors and Key Rates

Global events also influenced the dollar’s performance. On November 13, the US currency slightly retreated after President Donald Trump signed a bill ending the longest government shutdown in US history, boosting risk appetite.

• On that date, the dollar index, which measures the greenback against six other major currencies, fell 0.2% to 99.150, near its lowest level for the month.
• The pound sterling showed little dynamism, hampered by disappointing economic data.

Source: Defi Media