Bank of Mauritius Injects $155M in 2026, Yet Dollar Shortage Persists

The Bank of Mauritius injected a further 15 million US dollars into the local foreign exchange market on 5 November, bringing its total interventions for the year to 155 million dollars. Despite this significant outlay, individuals and small businesses continue to report difficulties obtaining foreign currency at commercial bank counters across the island.

The central bank's interventions are designed to stabilise the Mauritian rupee and ensure an adequate supply of hard currency for importers and businesses. However, the gap between official market activity and what is available at the retail level remains a source of frustration for many residents.

Official figures show that total foreign exchange transactions reached 3.2 billion dollars between May and July 2026 alone, reflecting the scale of currency flows passing through Mauritius's financial system. That figure covers transactions between banks, authorised dealers and businesses, rather than individual consumers at the counter.

The Bank of Mauritius, known locally as the BOM, is the country's central bank and monetary authority. It manages the exchange rate, supervises financial institutions and holds the country's foreign reserves. When the rupee comes under pressure, the BOM can sell dollars from its reserves directly into the market to ease demand.

Reserves are currently reported to be at a level considered adequate by regional standards, which makes the persistent shortage at retail counters harder to explain on paper. Analysts suggest the disconnect may stem from how banks allocate the currency they receive, prioritising large commercial clients, importers and institutional customers over members of the public seeking smaller amounts for travel or personal use.

For ordinary Mauritians, the practical impact is real. Travellers heading abroad, students paying overseas tuition fees, and families sending remittances have all reported being turned away or placed on waiting lists at bank branches. Some have been forced to turn to exchange bureaux or informal channels, where rates are less favourable.

The situation also matters for businesses that import goods and need to settle invoices in dollars or euros. Delays in accessing foreign currency can disrupt supply chains and push up costs, with knock-on effects for retail prices on the island.

What this means: Even when a central bank has adequate reserves and is actively selling dollars into the market, that liquidity does not always filter down quickly to everyday customers. The BOM's injections stabilise the exchange rate and support wholesale transactions, but the retail shortage points to a distribution problem within the banking system. Without clearer rules or requirements on how commercial banks allocate foreign currency to individuals, the counter shortage is likely to persist regardless of how much the BOM injects at the top of the system.

Source: Le Defi Media