(Bloomberg) -- Mauritius’s rupee is set to build on its strongest quarter in more than a decade as tourism receipts in the Indian Ocean island nation’s summer months increase, according to Oxford Economics Africa.
“We expect the rupee to appreciate slightly in the fourth quarter thanks to strong tourism inflows toward the end of the year,” said Brendon Verster, an economist at Oxford Economics Africa. “We forecast the rupee at around 45.8 to the dollar by year-end,” he said in e-mailed response to queries on Tuesday.
The rupee gained 5.7% against the dollar in the third quarter, the most in 13 years, and is currently trading at 46.2 per dollar. It benefited from a weaker US currency and almost $300 million sold on the foreign exchange market by the Bank of Mauritius.
Mauritius expects to receive 1.4 million visitors this year, 8% more than in 2023.
Other factors that should support the rupee include the benchmark interest rate remaining at a multiyear high, even after a 50 basis-point cut to 4% last week, and lower borrowing costs in the US and Europe, Verster said.
--With assistance from Alister Bull and Ana Monteiro.
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