Mauritius rupee strength damps rally in inflation in July

Mauritius’s inflation was little changed at 6.7 percent in July as a strong currency curbed the impact of rising commodity prices.

Inflation compared with 6.6 percent in June, the Port Louis-based Central Statistics Office said its website today. Prices gained 0.3 percent in the month.

“The strong rupee has helped in containing our import bills,” Renganaden Padayachy, an economist at the Ebene-based Mauritius Chamber of Commerce and Industry, said by phone.

Mauritius, an Indian Ocean island nation with a population of 1.3 million people, is a net importer of fuels and food, with 67 percent of its import bill denominated in dollars, according to Bank of Mauritius. Since the beginning of the year, the rupee has gained 8.8 percent against the U.S. currency.

The rupee weakened 0.2 percent to 28.15 to the dollar at 10:30 a.m. in Port Louis, according to data compiled by Bloomberg.

The average inflation rate for the past 12 months increased to 5.5 percent in July from 5.1 percent in June, the statistics agency said.

“The dynamics are still pointing up, which means that the central bank will have to maintain its very prudent stand,” Bank of Mauritius Governor Rundheersing Bheenick said in a transcript of an interview published by l’Express newspaper on July 29.

The central bank forecasts economic growth of 4.6 percent this year, driven by textiles and tourism.

An increase in interest rates from the current 5.5 percent is unwarranted as “priority should be given to growth,” Padayachy said.