Mauritian Rupee snaps 4-day gain

Mauritius’s rupee depreciated for the first time in a week against the dollar and stocks fell the most in more than two months as the debt crisis in Europe, the nation’s main market, curbed demand for emerging-market assets.

The rupee weakened 2.2 percent to 28.55 per dollar, by 3:15 p.m., in Port Louis, the capital, the weakest since April 6. The 37-member SEMDEX index of stocks declined 0.6 percent to close at 2,085.45, the biggest drop since March 18.

Emerging-market stocks slipped to a two-month low after Fitch Ratings cut Greece’s credit rating by three levels on May 20, citing the challenge of fiscal and structural reform needed to secure the state’s solvency. Standard & Poor’s lowered Italy’s rating outlook to negative on the same day. The euro depreciated as much as 1.4 percent to $1.3970, the weakest since March 17.

“The strength of the Mauritian rupee is determined by the dollar versus euro exchange rate,” Imrith Ramtohul, a senior investment manager who oversees 6 billion rupees ($210.2 million) of assets at Mauritius Union Assurance Co. (MUA), said in a phone interview. “The rising concerns of a debt crisis in Europe today resulted in a weaker euro, hence impacting on the local currency.”

Europe accounted for 67 percent of tourist arrivals in the Indian Ocean Island nation, the Mauritius Tourism Promotion Authority said April 22. The continent bought 63.4 percent of the country’s produce in 2010, the data agency said on March 1.