The Bank’s exchange rate policy was immediately geared towards one prime objective: achieve and maintain the competitiveness of the export sectors. Following the introduction of the new currency peg, the Bank of Mauritius monitored the exchange rate of the rupee on a daily basis. Corrective steps were taken as and when they were deemed necessary.
In this exercise, constant attempts were made to keep the exchange rate of the rupee (I mean real effective exchange rate of the rupee) stable. The exchange rate of the rupee, deftly managed, in an imperfect financial market eventually enabled exporters to better predict costs and prices of their products.