Gradual Liberalization of Key Markets
The Road to Sustainable Growth in Mauritius
Mauritius has achieved sustained economic growth over the past three decades notwithstanding the limited liberalization of its foreign exchange and financial markets which took place even during the adjustment period of 1979–86. Reforms in these markets have in fact been introduced gradually and have been stepped up only as from the 1990s when they were considered to be sustainable. A policy of mild exchange rate depreciation has helped to boost exports and growth; the exchange rate is currently market determined and current and capital transfers have been completely liberalized. In the financial market, credit ceilings have been removed and interest rate controls have given way to open market operations. There has also been improved financial intermediation, in keeping with the McKinnon–Shaw hypothesis.