Mauritius’s rupee depreciated to an almost one-week low against the dollar on concern a debt crisis in Europe is deepening, curbing demand for higher-yielding, frontier market assets. The Indian Ocean island nation’s currency retreated as much as 0.6 percent to 28.35 per dollar, its weakest level since July 5, and traded at 28.30 rupees by 2:07 p.m. in Port Louis, the capital. The rupee strengthened 0.6 percent to 39.9493 per euro. The euro fell to two-week lows against the dollar and yen while emerging-market currencies weakened after Die Welt reported that the European Central Bank is seeking to expand a fund so it could aid Italy and the Financial Times said European leaders may accept a Greek default on some bonds. “The dollar’s gain against the euro and thin trading has resulted in the rupee also weakening,” Oumesh Mungroo, treasurer at the Ebene-based local unit of Barclays Bank Plc, wrote in e-mailed comments. “There is not significant demand for foreign currencies.” Mauritius, with a population of 1.3 million people, derives most of its foreign currency from tourism and textile exports. Europe is its main market, accounting for 41 percent of revenue, according to Bank of Mauritius data. Stocks dropped the most in more than a month, with the 38- member SEMDEX index falling 0.5 percent to 2,089.37 by the 1:30 p.m. close. Mauritius Commercial Bank, the country’s biggest lender by market value, retreated 1.1 percent to 184 rupees, the lowest since May 10. To contact the reporter on this story: Kamlesh Bhuckory in Port Louis via Johannesburg at 1933 or gbell16@bloomberg.net To contact the editor responsible for this story: Antony Sguazzin in Johannesburg at asguazzin@bloomberg.net

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