Mauritius Foreign Currency Shortage 2025

How It’s Impacting Businesses and the Festive Season

As 2025 comes to an end, a shortage of foreign currency in Mauritius — especially US dollars — is creating real challenges for businesses and importers. It follows recent trends highlighted in our Mauritius Economic Forecast 2025–2027. While official figures suggest stability, the private sector is feeling the pressure just as the busy festive season approaches.

As of September 2025, the Bank of Mauritius (BoM) reported foreign exchange reserves of USD 9.56 billion, slightly lower than the record USD 9.72 billion in June. These reserves help the country pay for imports, repay external debts, and support the rupee. However, many local businesses say accessing foreign currency has become increasingly difficult.

The Real Foreign Currency Situation in Mauritius

Between January and April 2025, foreign exchange transactions reached USD 4.6 billion — up 15% compared to 2024. Yet many importers and traders still face limited dollar allocations. Some businesses are even turning to informal markets where exchange rates are higher.

The situation worsened in August 2025 after a USD 550 million outflow — driven by USD 200 million in car imports and a USD 350 million transaction by the State Trading Corporation (STC). These large payments have tightened liquidity, leaving fewer dollars available for day-to-day business needs.

Why Is There a Dollar Shortage in Mauritius?

Several factors are contributing to this ongoing challenge:

• Higher import demand: More spending on vehicles, fuel, and goods means more demand for foreign currency.
• Trade imbalance: Mauritius imports far more than it exports, putting constant pressure on reserves.
• Depreciating rupee: As the rupee weakens, both companies and individuals hold onto foreign currency to protect themselves.
• Speculation: Some exporters and traders are waiting for the rupee to fall further before exchanging their dollars, worsening the shortage.

How the Dollar Shortage Affects Businesses

The impact of the foreign currency shortage is being felt across multiple sectors:

• Importers are struggling to pay overseas suppliers, leading to delayed shipments.
• Manufacturers dependent on imported materials are facing higher production costs — especially in textiles, plastics, and automotive industries.
• Retailers are increasing prices as the cost of goods and parallel market exchange rates rise.
• SMEs find it difficult to secure foreign currency loans or repay debts in USD or EUR.

A Port Louis car dealership reported waiting weeks for foreign currency approval to pay suppliers — and as a result, vehicle prices in rupees have risen by over 20% since early 2024.

Bank of Mauritius and Government Measures

The Bank of Mauritius has rolled out several initiatives to stabilize the situation:

• USD 3.9 billion in currency swap deals during early 2025 to boost liquidity.
• Maintaining the Key Repo Rate at 4.5% to control inflation and support the rupee.
• Working with the Ministry of Finance to monitor trade and prevent speculative hoarding.

However, economists say Mauritius needs long-term structural reforms — including boosting export income, attracting more foreign direct investment (FDI), and improving transparency in the foreign exchange market.

What Businesses Can Do to Cope

Mauritian businesses can take proactive steps to manage currency risks:

• Diversify suppliers to avoid dependence on a single market.
• Use forward contracts to lock in exchange rates in advance.
• Expand exports to new markets such as ICT or financial services.
• Open multi-currency accounts or explore hedging tools with local banks.

Outlook for the 2025 Festive Season

With Christmas and New Year around the corner, demand for imported goods — from electronics to vehicles — is expected to rise. If dollar shortages persist, businesses may face delayed shipments, higher prices, and reduced festive stock.

Still, the situation is not without hope. If the BoM maintains stability and businesses manage their currency exposure wisely, Mauritius can weather this period without major disruption.

Conclusion

The foreign currency shortage in Mauritius is a reminder of how global and local economic forces can affect a small, import-reliant island economy. While the Bank of Mauritius works to maintain stability, businesses need to adapt quickly — through smarter financial planning, supplier diversification, and currency risk management.

As the festive season 2025 approaches, a coordinated effort between businesses, policymakers, and financial institutions is key to keeping the economy stable and ensuring Mauritian consumers are not hit with steep price increases.