Mauritius’s rupee headed for the lowest closing level in three weeks against the dollar, amid concerns that Europe’s debt crisis may spread to France, its biggest trading partner in the eurozone.
The currency weakened by 0.7 percent to 28.25 per dollar by 2:09 p.m. in Port Louis, heading for its closing lowest level since July 21, according to Bloomberg data. Versus the euro, the rupee depreciated 0.5 percent to 40.0176.
All three major rating companies affirmed France’s top credit grade amid speculation Europe’s debt crisis will spread to the region’s second-largest economy. Societe Generale SA, France’s second-biggest bank, rose the most in more than a year in Paris trading after Chief Executive Officer Frederic Oudea denied “rumors” and asked the nation’s market watchdog for a probe into yesterday’s 15 percent share-price tumble.
“Markets are getting worried about the consequences of the latter on its banking sector, which is significantly exposed to junk bonds from peripheral European economies,” analysts of Port Louis-based Mauritius Commercial Bank (MCB) said in an e-mailed note to clients today.
France accounted for almost a third of tourist arrivals to the Indian Ocean Island nation for the first half of 2011, according to Mauritius Tourism Promotion Authority data. The country buys 16 percent of Mauritian manufactured goods, the Central Statistics Office said on May 31. It is the largest source of foreign direct investment for the quarter through March, with a share of 33 percent, according to Bank of Mauritius data.