PORT LOUIS, Sept 8 (Reuters) - Mauritius is to provide foreign currency support to its sugar and other export-oriented sectors to cushion them against the impact of a strong rupee , the Finance Ministry said on Friday.
Businesses have been calling on policymakers to intervene over recent weeks after export revenues fell 8 percent to 20.5 billion rupees year on year in the six months to end June.
Pravind Kumar Jugnauth, who is both prime minister and finance minister, told business executives on Friday the government would introduce an exchange rate support scheme, a statement from the Finance Ministry said.
The rupee traded at 32.34 rupee against the dollar and at 38.92 against the euro on Friday. The rupee is 9 percent up against the dollar so far this year, and 5 percent down against the euro.
The statement gave no overall support amount, but said the support will be provided based on a difference between the rate at which an exporter exchanged their dollars and a reference rate of 34.50 rupees per dollar.
The ministry said it would set a maximum support of 2.50 rupees per dollar and the scheme would start on Sept. 11 and run for six months.
Under the programme, sugar planters and millers will be provided with a financial support of 1,250 rupees per tonne of sugar.
On Wednesday, the Bank of Mauritius slashed its key repo rate by 50 basis points to try to stimulate the Indian ocean island’s economy.
Famed for its white sand beaches and luxury spas, the Indian Ocean island nation is diversifying its economy away from sugar, textiles and tourism into offshore banking, business outsourcing, luxury real estate and medical tourism. (Reporting by Jean Paul Arouff; Editing by George Obulutsa and Alison Williams)