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The currency market would be in dire straits. We are told that some banks practice the “forward rate” in the short term, which would distort the market. Is the Bank of Mauritius aware of this situation and what is it planning to do to resolve the problem?
You first need to understand how the currency market works. There is what we call the “spot rate” and the “forward rate”. The Bank of Mauritius has a guideline for the spot rate. However, what about the “forward rate”, it was vague. This includes in particular “hard currencies”, in this case, the dollar, the euro and the pound sterling. For around two months now, the Central Bank has been committed to working with the country's various banks as well as Bloomberg to introduce new guidelines to regulate the forward market. This approach has evolved. We're ready for the dollar. On the other hand, consultations are still underway with Bloomberg concerning the euro and the pound sterling. The introduction of these “guidelines” will be imminent once the mechanisms are finalized for these two currencies. I, moreover, as chairman of the Banking Committee, met all the CEOs of banks in Mauritius last week. The discussions mainly focused on these “guidelines” in preparation. These will result in better order on the “forward market” once its introduction has taken place.

There is no shortage of foreign exchange as such. There are obviously pressures, but I wouldn't describe the situation as 'shortage'.”

Are you able to say today that there is no shortage on the foreign exchange market in Mauritius?
There is no shortage of foreign exchange as such. There are obviously pressures, but I would not describe the situation as “shortage”. The Bank of Mauritius is monitoring the situation closely on a daily basis. We will intervene in the domestic foreign exchange market if the need arises. We have never hesitated to do so and we will do so if necessary.

What could be the impact of the sliding of the rupee on inflation which is already expected to rise with the budgetary measures?
I think there's a lot of excessive talking that happens. Budgetary measures will certainly have pressures, but we will continue to do the right thing. The measures will not necessarily go against the new monetary policy framework of the Bank of Mauritius, whose inflation target range is between 2% and 5%. I remain convinced that the inflation rate will be below 5% by the end of 2024.

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