OVERVIEW
Net
foreign assets of the banking system went up by Rs629 million or by 2.2 per
cent, from Rs29,076 million at the end of January 2001 to Rs29,705 million at
the end of February 2001. Net foreign assets of Bank of Mauritius fell by Rs399
million or by 1.8 per cent, from Rs21,658 million to Rs21,259 million. Net
foreign assets of commercial banks expanded by Rs1,028 million or by 13.9 per
cent, from Rs7,418 million to Rs8,446 million.
Domestic
credit rose by Rs801 million or by 0.9 per cent, from Rs88,700 million at the
end of January 2001 to Rs89,501 million at the end of February 2001.
Net
credit to Government increased by Rs125 million or by 0.7 per cent, from
Rs16,672 million at the end of January 2001 to Rs16,797 million at the end of
February 2001. Net credit to Government from Bank of Mauritius rose by Rs293
million or by 17.7 per cent, from Rs1,652 million to Rs1,945 million. Net
credit to Government from commercial banks dropped by Rs168 million or by 1.1
per cent, from Rs15,020 million to Rs14,852 million.
Credit to
the private sector from commercial banks went up by Rs688 million or by 1.0 per
cent, from Rs71,402 million at the end of January 2001 to Rs72,090 million at
the end of February 2001. Additional credit was extended to "EPZ"
(Rs602 million) and "Traders" (Rs142 million).
Money
supply M2 increased by Rs1,592 million or by 1.7 per cent, from Rs94,315
million at the end of January 2001 to Rs95,907 million at the end of February
2001. Narrow money supply, one of the components of M2, went down by Rs616
million or by 5.1 per cent, from Rs12,198 million to Rs11,582 million.
Quasi-money, the other component of M2, went up by Rs2,208 million or by 2.7
per cent, from Rs82,117 million to Rs84,325 million.
The level
of reserve money fell by Rs726 million or by 6.4 per cent, from Rs11,410
million at the end of January 2001 to Rs10,684 million at the end of February
2001.
Based on liquidity
conditions in the market, the Bank carried out five reverse repo and two repo
transactions with commercial banks in March 2001 for periods varying from 1 to
4 days. The highest yield for the reverse repo transactions was 7.00 per cent.
The lowest yield for the repo transactions was 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 March 2001 was 1,817, involving a total amount of
Rs29,985 million as compared to 1,191 transactions for a total amount of
Rs21,741 million in February 2001. On an average basis, 91 transactions were
routed daily in March 2001, compared to 70 in February 2001, and the daily
value of transactions went up to Rs1,499 million from Rs1,279 million in
February 2001.
Between
end-June 2000 and end-February 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
47,874 from 610,849 to 658,723. 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 1.424
million in February 2001. The value of
such transactions increased from Rs1,998 million to Rs2,215 million over
that period. Outstanding advances on
credit cards rose from Rs536 million to Rs606 million during the same period.
On the international foreign exchange market, during March 2001, the US dollar, on an average basis, appreciated against all major currencies. Despite heavy losses in US equities and renewed concerns over US economic prospects, the US dollar, on average, remained strong, benefiting from its safe-haven status. In fact, while weakness in US assets markets spilled over into other major equity markets, investors shifted to the safety of US treasuries and dollar cash holdings. As widely expected, the US Federal Reserve, at its FOMC meeting on 20 March 2001, lowered its federal funds rate, for the third time this year, by 50 basis points to 5.0 per cent. In its accompanying statement, the Federal Reserve maintained its implied easing bias.
The
euro, which started the month at around US$0.9241, came under strong selling
pressure to trade below the 90 cents dollar level as the market expressed its
disappointment over the single currency’s failure to benefit from Wall Street
equity losses. Concerns that the ECB
was not doing enough to boost European economic growth in the face of a global
economic slowdown also weighed on the single currency. The euro suffered its major setback against
the dollar, attaining its intra-month low of US$0.8788 on 29 March 2001, when
the ECB, at its third policy meeting during the month, kept its key refinancing
rate unchanged at 4.75 per cent, adopting a ‘wait and see’ stance on interest
rates.
The
Pound sterling, driven mainly by the euro/dollar downward movement, lost ground
against the US dollar. The Bank of
England at its monthly Monetary Policy Committee meeting left its key repo rate
on hold at 5.75 per cent on 8 March 2001.
The Japanese yen remained
weak against the US dollar, pressured by mounting economic and political
worries. Declines in Tokyo share prices
also weighed on the yen. On 19 March
2001, the Bank of Japan at its policy board meeting reduced its overnight call
rate by 15 basis points, thereby reinstating its zero interest rate policy,
which it abandoned in August 2000.
Direct sales of foreign currencies by the Mauritius Sugar Syndicate
(MSS) to the banking sector during March 2001 amounted to an equivalent of
US$27.7 million. The Bank of Mauritius
did not intervene in the interbank foreign exchange market during March 2001.
Reflecting
international trends and local market conditions, the rupee, on average,
depreciated between February 2001 and March 2001 against the US dollar and
Pound sterling by 0.5 per cent and 0.01 per cent, respectively. It, however, appreciated against the Japanese
yen and euro by 3.6 per cent and 0.6 per cent, respectively. During March 2001, the rupee weakened against the US dollar to trade at
an average rate of Rs28.319 compared with an average rate of Rs28.169 in February
2001. The rupee edged lower against the
Pound sterling to trade at an average rate of Rs40.950 in March 2001 as against
an average rate of Rs40.945 in February 2001.
The rupee, however, firmed up against the Japanese yen to trade at an
average rate of Rs23.465 per 100 Yen in March 2001 from an average rate of Rs24.308 per 100 Yen in
February 2001. The rupee also
strengthened vis-à-vis the euro, trading at an average rate of Rs25.795 in
March 2001 compared with an average rate of Rs25.950 in February 2001.
On
an average basis, between January 1999 and March 2001, the Philippines peso,
Thailand baht, Indonesian rupiah, Mauritian rupee, Korean won, Singapore
dollar, Taiwan dollar and Hong Kong dollar appreciated against the euro by 0.7
per cent, 6.2 per cent, 7.8 per cent, 12.4 per cent, 15.9 per cent, 20.8 per
cent, 25.9 per cent and 26.4 per cent, respectively. The South African rand, however, depreciated vis-à-vis the euro
by 2.8 per cent.
The
foreign exchange reserves of the Bank of Mauritius increased by Rs188 million,
from Rs21,259 million at the end of February 2001 to Rs21,447 million at the
end of March 2001.
Net
International Reserves
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), increased by Rs677 million, from Rs29,601 million at the end of January 2001 to Rs30,278 million at the end of February 2001. Following the release of external trade data for the fourth quarter of 2000, import coverage has been revised and is now based on the value of the import bill for calendar year 2000. On this basis, the end-February 2001 level of net international reserves of the country represented 28.8 weeks of imports, up from 28.1 weeks at the end of January 2001.