Foreign exchange market: new dollar shortage

The currency market is struggling to stabilize despite higher tourism revenues in the first quarter of this year and rising reserves. Importers are paying the price for this situation which has financial consequences.

The tourism revenue recorded by the country during the first quarter of this year is Rs 23.98 billion, or Rs 1.7 billion more than during the corresponding period in 2023. Enough to allow the foreign exchange market and mainly importers of blow ? The latest intervention by the Bank of Mauritius in the domestic foreign exchange market which dates back to April 1 could be interpreted as an indication that the market is doing better. The BoM had sold a total amount of $5 million at the rate of Rs 46.40 per dollar.

However, it turns out that the foreign exchange market, mainly that of the dollar, is lagging behind. Some importers agree that there is a “shortage” of foreign currency. An operator emphasizes that several banks have made him understand that there are no currencies on the market. He needed $45,000 to pay his import bills. “Knowing that it was impossible to obtain the full amount at once from a single bank, I requested $15,000 from a banking entity, but without success. Our merchandise was already at the port. We will have to pay for the delays if the foreign currency necessary to unlock our imports is not obtained,” he concedes. Faced with this disappointment, this importer had to manage to honor its commitments to its customers.

Illegal act

A bank therefore offered to pay more than the display rate in order to obtain foreign currency. “I paid a rupee more than the posted rate on every dollar. Bizin met for pou gagn for,” he says. Questioned about this practice, a banker insisted that the action of this bank was illegal. “This is against banking law. There are probably some who are taking advantage of the situation to earn more money,” the banker continues. As for the situation prevailing on the market, the banker moderates his remarks and explains that there is no shortage. “The market has not fully recovered since the pandemic. There was, however, a shortage of foreign exchange during Covid-19. Currently, the market is short,” he says.

Furthermore, figures published by the Central Bank indicate that the country's gross official international reserves (GOIR) amount to Rs 337.9 billion, the equivalent of $7.23 billion at the end of April 2024. These increased by Rs 47 billion compared to the corresponding period of 2023.