OVERVIEW
Net
foreign assets of the banking system went down by Rs3,952 million or by 12.0
per cent, from Rs33,028 million at the end of December 2000 to Rs29,076 million
at the end of January 2001. Net foreign assets of Bank of Mauritius fell by
Rs3,182 million or by 12.8 per cent, from Rs24,840 million to Rs21,658 million,
mainly on account of the repayment of the bridging loan raised in October 2000
for the repayment of the Floating Rate Note. Net foreign assets of commercial
banks declined by Rs770 million or by 9.4 per cent, from Rs8,188 million to
Rs7,418 million.
Domestic
credit rose by Rs3,859 million or by 4.5 per cent, from Rs84,841 million at the
end of December 2000 to Rs88,700 million at the end of January 2001.
Net
credit to Government expanded by Rs3,041 million or by 22.3 per cent, from
Rs13,631 million at the end of December 2000 to Rs16,672 million at the end of
January 2001. Net credit to Government from Bank of Mauritius increased by
Rs2,787 million. Net credit to Government from commercial banks rose by Rs254
million or by 1.7 per cent from Rs14,766 million to Rs15,020 million.
Credit to
the private sector from commercial banks went up by Rs832 million or by 1.2 per
cent, from Rs70,570 million at the end of December 2000 to Rs71,402 million at
the end of January 2001. Additional credit was extended to
"Manufacturing" sector (Rs341 million), "Traders" (Rs276
million) and "Statutory & Parastatal Bodies" (Rs226 million).
Money
supply M2 fell by Rs572 million or by 0.6 per cent, from Rs94,887 million at
the end of December 2000 to Rs94,315 million at the end of January 2001. Narrow
money supply, one of the components of M2, went down by Rs1,101 million or by
8.3 per cent, from Rs13,299 million to Rs12,198 million. Quasi-money, the other
component of M2, went up by Rs529 million or by 0.6 per cent, from Rs81,588
million to Rs82,117 million.
The level
of reserve money fell by Rs355 million or by 3.0 per cent, from Rs11,765 million
at the end of December 2000 to Rs11,410 million at the end of January 2001.
Based on liquidity conditions in the market, the Bank carried out one variable-yield reverse repo and two fixed-yield repo transactions with commercial banks in February 2001 for periods varying from 1 to 3 days. The highest yield for the variable-yield reverse repo transaction was 7.00 per cent. The two fixed-yield repo transactions were conducted at 8.25 per cent.
Mauritius
Automated Clearing and Settlement System(MACSS)
The
number of transactions routed through the Mauritius Automated Clearing and
Settlement System (MACSS) in February 2001 was 1,191, involving a total amount
of Rs21,741 million, compared to 1,363 transactions for a total amount of
Rs31,970 million in January 2001. On an average basis, 70 transactions were
routed daily in February 2001, slightly up from 68 in January 2001, and the
daily value of transactions was Rs1,279 million, down from Rs1,599
million. It is expected that both the
volume and value of transactions routed through the MACSS will increase as
customers’awareness of its advantages increases over time.
Between
end June 2000 and end January 2001, the number of Automated Teller Machines
(ATMs) in operation in Mauritius increased by 10 from 221 to 231 and the number
of cardholders (that is to say the number of cards in circulation) went up by
43,292 from 610,849 to 654,141. The
number of transactions involving the use of credit cards, debit cards, ATMs and
Merchant Points of Sale increased from 1.416 million in June 2000 to 1.715
million in January 2001. The value of
such transactions increased from Rs1,998 million to Rs2,784 million over
that period. Outstanding advances on
credit cards rose from Rs536 million to Rs598 million during the same period.
International
and Domestic Foreign Exchange Markets
On the international foreign exchange market, during February 2001, the US dollar, on an average basis, appreciated against the euro and Pound sterling but depreciated vis-à-vis the Japanese yen.
The US dollar derived support against the major European currencies, helped by positive comments from US officials backing a strong dollar policy. Moreover, the Federal Reserve Chairman, Alan Greenspan, in his testimony to the Senate Banking Committee, provided additional support to the dollar by giving a balanced view of the US economy. While there were downside risks to the US economy, the Chairman stated that the excessive weakness seen at the end of last year has not followed through into January 2001. He added that the positive long-term US outlook was undiminished and that growth would pick up in the range of 2.0 – 2.5 per cent this year.
The
euro, which started the month above US$0.93, weakened against the US dollar to
reach an intra-month low of US$0.9042 on 23 February 2001. Euro sentiment was dented by the single
currency’s inability to capitalise on the release of positive euro zone data.
The financial crisis in Turkey, which led to the floating of the Turkish lira,
also undermined the euro. However, the
single currency’s failure to break below the US$0.90 psychological level helped
the euro to recover against the dollar to close the month at around US$0.92. The ECB left its key refinancing rate
unchanged at 4.75 per cent at its governing council meetings on 1 and 15
February 2001.
The Pound sterling, which opened the month at a high of US$1.4750, came under downward pressure vis-à-vis the US dollar after the Bank of England, at its monthly Monetary Policy Committee meeting on 8 February 2001 cut, for the first time since June 1999, its key repo rate by 25 basis points to 5.75 per cent. The minutes of the meeting released thereafter, which revealed that members unanimously voted for a quarter point reduction in interest rate and even considered a more aggressive half point easing, further undermined the Pound. At the close of the month, the Pound was trading at around US$1.4402.
The
Japanese yen strengthened against the US dollar amid ongoing fund repatriation
by Japanese investors ahead of the fiscal year end in March. The Bank of Japan cut its official discount
rate by 15 basis points to 0.35 per cent on 9 February 2001, the first rate
reduction in six years, and by a further 10 basis points to 0.25 per cent on 28
February 2001.
Direct sales of foreign currencies by the Mauritius Sugar Syndicate
(MSS) to the banking sector during February 2001 amounted to an equivalent of
US$26.3 million. The Bank of Mauritius
did not intervene in the interbank foreign exchange market during February
2001.
Reflecting
international trends and local market conditions, the rupee, on average,
depreciated between January 2001 and February 2001 against the Japanese yen and
US dollar by 1.1 per cent and 0.5 per cent, respectively. It, however, appreciated against the euro
and Pound sterling by 1.5 per cent and 1.2 per cent, respectively. During February 2001, the rupee lost ground
against the Japanese yen to trade at an average rate of Rs24.308 per 100 Yen in
February 2001 from an average rate of Rs24.043 per 100 Yen in January
2001. The rupee weakened against the US
dollar to trade at an average rate of Rs28.169 in February 2001 compared with
an average rate of Rs28.027 in January 2001.
The rupee, however, firmed up against the Pound sterling to trade at an
average rate of Rs40.945 in February 2001 as against an average rate of
Rs41.441 in January 2001. The rupee
also strengthened vis-à-vis the euro, trading at an average rate of Rs25.950 in
February 2001 compared with an average rate of Rs26.327 in January 2001.
On
an average basis, between January 1999 and February 2001, the Philippines peso,
Thailand baht, Mauritian rupee, Indonesian rupiah, Korean won, Singapore
dollar, Hong Kong dollar and Taiwan dollar appreciated against the euro by 0.2
per cent, 7.9 per cent, 11.7 per cent, 12.2 per cent, 17.8 per cent, 21.2 per
cent, 24.8 per cent and 25.4 per cent, respectively. The South African rand, however, depreciated vis-à-vis the euro
by 3.2 per cent.
The
foreign exchange reserves of the Bank of Mauritius decreased by Rs399 million,
from Rs21,658 million at the end of January 2001 to Rs21,259 million at the end
of February 2001.
Net
International Reserves
Reflecting mainly the repayment of the bridging loan raised in October 2000 for the repayment of the Floating Rate Note, the net international reserves of the country, made up of the net foreign assets of the banking system, the foreign assets of the Government and the country’s Reserve Position in the International Monetary Fund (IMF), decreased by Rs3,953 million from Rs33,554 million at the end of December 2000 to Rs29,601 million at the end of January 2001. Based on the value of the import bill for fiscal year 1999-00, excluding the purchase of aircraft, the end of January 2001 level of net international reserves of the country represented 28.0 weeks of imports, down from 31.7 weeks at the end of December 2000.