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Mauritius exporters demand shift in monetary policy
09 Aug '10
2 min read
Last week, Mauritius-based exporters addressed the Indian Ocean Island's central bank to knock a full point of interest rate in order to improve investment, save jobs and help its economy recover.
Textile products lead the country's export businesses, totalling for 65 percent of the sector's net sales, supplying key European high street retailers, including Next, Marks & Spencer from Britain and Spain-based Zara.
Since the rupee has strengthened quite sharply as against the Euro, exporters are demanding a shift in the monetary policy.
As per members of Mauritius Exports Association, they can no longer wait, as they have already witnessed lay-offs in the textile segment. Since, the value of currency is determinant, and Mauritius' competitors maintaining their currencies at a competitive level, exporters feel that, the Bank of Mauritius should send clear signals by reducing the key repo rate by 1 percent.
During its last meeting, which was held in June, Mauritius Monetary Policy Committee had left the benchmark repo rate unchanged at 5.75 percent, meeting with the market expectations and keeping in mind the ambiguity owing to Europe's debt crisis, which is now easing.
As industry sources, since inflation is under control at 1.8 percent, the aim should now be on growth. More over, employers are keen on sustaining their workers' jobs, but firms should be provided with the opportunity to earn revenues.
As against the previous expected figure of 4.3 percent, growth is likely to be as low as 3.5 percent this year, and hence government is intending to release a package of measures in the near future to help the export sector.
The world economic meltdown, had adversely affected Mauritius apparel firms, pushing them to reduce prices so as to hand on to the market share and continue encouraging demand.
In December 2008, $340 million stimulus package was unveiled by government, which earlier focused on struggling textile suppliers.
Textile products lead the country's export businesses, totalling for 65 percent of the sector's net sales, supplying key European high street retailers, including Next, Marks & Spencer from Britain and Spain-based Zara.
Since the rupee has strengthened quite sharply as against the Euro, exporters are demanding a shift in the monetary policy.
As per members of Mauritius Exports Association, they can no longer wait, as they have already witnessed lay-offs in the textile segment. Since, the value of currency is determinant, and Mauritius' competitors maintaining their currencies at a competitive level, exporters feel that, the Bank of Mauritius should send clear signals by reducing the key repo rate by 1 percent.
During its last meeting, which was held in June, Mauritius Monetary Policy Committee had left the benchmark repo rate unchanged at 5.75 percent, meeting with the market expectations and keeping in mind the ambiguity owing to Europe's debt crisis, which is now easing.
As industry sources, since inflation is under control at 1.8 percent, the aim should now be on growth. More over, employers are keen on sustaining their workers' jobs, but firms should be provided with the opportunity to earn revenues.
As against the previous expected figure of 4.3 percent, growth is likely to be as low as 3.5 percent this year, and hence government is intending to release a package of measures in the near future to help the export sector.
The world economic meltdown, had adversely affected Mauritius apparel firms, pushing them to reduce prices so as to hand on to the market share and continue encouraging demand.
In December 2008, $340 million stimulus package was unveiled by government, which earlier focused on struggling textile suppliers.
Fibre2Fashion News Desk - India
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