Net international reserves appear fully adequate, but not excessive.” (Staff report for the 2012 Article IV Consultation, February 2012) Excerpt 2: “Using cross-country panel methodologies as well as single country time series techniques, we estimate that the Mauritian Rupee is mildly overvalued with respect to fundamentals. Nevertheless, there is significant uncertainty about the size of the overvaluation.
Mauritian competitiveness in general (beyond real exchange rate issues) appears to have declined with respect to exports, labor productivity, growth in unit labor costs, and other structural competitiveness indicators” (IMF: Mauritius External Balances from a Long-Term Perspective – May 2012) Excerpt 3: “The balance of evidence suggests the need for measures to address external imbalances and declining competitiveness…….the real exchange rate in 2012 might be considered overvalued……although the evidence is not fully conclusive….the exchange rate is one of the tools to address analyzed imbalances; likely partially effective in the short run, but also probably the most ineffective tool for the long run.”  (IMF: Mauritius External Balances from a Long-Term Perspective – May 2012) Excerpt 4: “The recent strengthening of the Rupee owes to the depreciation of the Euro and the deteriorating conditions in the Euro area.” (IMF: Mauritius External Balances from a Long-Term Perspective – May 2012) Excerpt 5: “Empirical results indicate that the BOM’s FX intervention has generally been effective in affecting the volatility of the rupee exchange rates.” (IMF: Mauritius External Balances from a Long-Term Perspective – May 2012) Well, that should put paid to the argument that the Central Bank has been misguided in its forex intervention policies as much as to the contention that the salvation of the export sector depends on a currency fix that the Bank should provide.