Mauritius: The Minister of Finance lists measures to increase the inflow of foreign currency

The government has implemented several bold measures to increase the inflow of foreign currency into the country and one of the key measures is the reopening of borders in October 2021 to boost the local economy.

The Minister of Finance, Economic Planning and Development, Dr. Renganaden Padayachy, made the statement, today in the National Assembly, in response to the private opinion question on the ongoing decline in the exchange rate of the rupee against the US dollar and the consequent scarcity of this currency in commercial banks.

Other measures listed by the Minister of Finance are: the promotion of Mauritius as a business facilitation hub through the delisting of Mauritius from the list of the Financial Action Task Force, the European Union and the Kingdom -United ; concessional foreign currency loan contract; subsidies of Rs 8.2 billion on basic necessities; and the opening of economic activities to foreign investors and expatriates among others.

Dr Padayachy recalled that the COVID-19 pandemic has had a significant impact on the global economy, adding that the Russian-Ukrainian war has further aggravated the situation. These crises have contributed to a decline in the country’s economic activities, a depreciation of the rupee, a drop in foreign exchange earnings and an increase in inflation.

Mauritius, he said, recorded a deficit of some 122 billion in foreign exchange inflows for the period 2020 to 2022, and the Minister of Finance attributed it mainly to a considerable drop in income from tourism, exports and financial services.

Regarding the measures taken by the Bank of Mauritius (BOM) to ensure the smooth flow of currency, he indicated that since the outbreak of the pandemic in March 2020 until now, the BOM has sold some 2.9 billions of dollars. He added that as part of its efforts to facilitate economic transactions, BOM sold US$25 million at the rate of Rs 43.15 compared to 43.25 during its last intervention in the domestic foreign exchange market.

Minister Padayachy also pointed out that a budget of Rs 48 billion was allocated in 2014 as part of the welfare state and that currently the amount has doubled to more than Rs 93 billion. This, he said, shows the government’s commitment to work tirelessly despite the pandemic and the recession to contribute to the Mauritian economy and the well-being of the people.

The Finance Minister pointed out that inflation could be higher at a rate of around 6.6%, but the government is working on measures to maintain the level of consumer purchasing power and protect the population from the effects of crises current world events.