There are times when the government of a country needs to step in and provide aid to their export sector. Mauritius has seen this happen. A stable currency can have a significant impact on the trade industry.
Mauritius has a strong trade economy, although it does run at an export deficit. In 2017, the trade industry ran into export difficulties, resulting in a loss of revenue by 8% for exporters. This had a dramatic effect on sugar, as well as several other exported goods, based on the impact from the strong rupee which is the currency for several countries.
The government wanted to take action to lessen the blow of the loss being felt by many of the exporters. At this particular time, the rupee was trading at 32.34 against the dollar. For the euro, it was 38.92. The government’s solution was to introduce an exchange rate support scheme. This was welcome news for those in the sugar industry and mills.
Provisions of the Scheme
This scheme was implemented to provide temporary relief, as a result of the US dollar depreciating. It was available to the textile and seafood, as well as the jewellery, industries, along with giving aid to those who were exporting in US dollars to Africa. The sugar exporters were also protected in this scheme. The scheme, being a temporary one, was only in effect for six months, and no claims could be made after July 2018.
This example shows why Mauritius has done so well in growing and stabilising their economy. They have only been independent for just over fifty years, and they are a great example to many other parts of the world, who can learn much from how this country has been able to build themselves to a mid-income category.