(Bloomberg) -- The Mauritius rupee is set for its biggest monthly gain against the dollar in more than two years after the central bank repeatedly intervened to lift it from record lows.
The currency has appreciated 4% in July, the most since April 2022. It traded at around 46.65 per dollar on Wednesday, having plumbed a low beyond 49 earlier this month.
Its rebound is down to the Bank of Mauritius, which intervened four times over the course of July, selling a total of $150 million in foreign currency markets. Central Bank Governor Harvesh Seegolam has said authorities stand ready to intervene and that there is no shortage of firepower to do so.
“The recent foreign currency sales suggest a governmental or Bank of Mauritius strategy to strengthen the rupee,” said Sanjay Goolab, Managing Director for securities and execution at AXYS Investment Partners in Port Louis.
“Should this intervention trend persist over the coming months, combined with a boost in the tourism sector during the last quarter of the year, we could expect the rupee to be stronger by year-end,” Goolab said in e-mailed comments.
The tourism-dependent Indian Ocean island nation is a net importer of food, fuels and equipment, and seen the rupee weaken amid increased demand for dollars from importers. The country’s trade deficit is projected to balloon to a record this year.
Even after the July rebound, the rupee remains 5% lower this year against the dollar, and is on track for its seventh straight year of depreciation.
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