Macroeconomic Forecast Mauritius

August 2008 | Macroeconomic Forecasts

We believe much of the rupee's recent decline to MUR28.00/US$ from the MUR26.50/US$ region in mid-July can be attributed to significant dollar strengthening, as the rupee actually appreciated by 3.5% against the euro between July 24 and August 8. The rupee has since lost most of these gains against the euro to trade at MUR40.99/EUR, following an August 8 announcement by the Bank of Mauritius that the cash reserve ratio would be hiked to 6.0% from 4.0%, in an effort to control inflation, a move likely to weaken 2008 real GDP growth. As such, we are maintaining our MUR25.00/US$ end-08 forecast.

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