Mauritius’s rupee depreciated against the dollar as odds of a U.S. debt default increased and Moody’s investors Service cut Greece’s sovereign-credit rating, curbing demand for riskier, frontier-market assets. The currency dropped as much as 0.3 percent to 28.15 per dollar and traded at 28.05 by 12:26 p.m. in Port Louis, the capital. Against the euro, the currency of the Indian Ocean island nation’s main trading partner, the rupee strengthened 1 percent to 40.3004 rupees. Emerging-market stocks snapped four days of gains as U.S. lawmakers failed to agree on raising the nation’s $14.3 trillion debt ceiling, with Republican lawmakers preparing to force action on a shorter-term extension of the debt ceiling than President Barack Obama has requested. Greece’s long-term foreign-currency debt was downgraded to Moody’s second-lowest rating, the company said today. “The global risk backdrop has not improved considerably, despite the announcement of a new deal for Greece,” Societe Generale SA emerging-market strategists including London-based Gaelle Blanchard wrote in an e-mailed research note today. “Emerging-market assets remain subject to profit-taking risk which warrants a cautious stance, in our view, especially on the foreign-currency side.” The breakdown in U.S. debt talks has “increased the uncertainty level in the markets,” Mauritius Commercial Bank, the country’s largest lender by market value, said in an e- mailed note to clients today. The buying price for the dollar ranged from 27.3643 rupees to 27.5225 rupees, with a selling price of 28.8145 rupees per dollar, according to indicative rates on the Bank of Mauritius’s website. Mauritius’s 38-member SEMDEX index of stocks dropped 0.6 percent to 2,036.77, led by Mauritius Commercial Bank and State Bank of Mauritius Ltd. 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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