Tables of Modern Monetary Systems by Kurt Schuler ( Return to home page )


Mauritius

Political sketch

Formerly Île de France. Independent from the United Kingdom on 12 March 1968.

Mauritius was long a station on the shipping route from Europe to the Indies around the Cape of Good Hope. The Dutch were the first people to try to settle Mauritius (which they named after prince Maurice of Nassau), but they abandoned it after attempts of 1638-1658 and 1664-1710. On 20 September 1715 the French East India Company (Compagnie des Indes) occupied Mauritius, which it renamed Île de France; the French government took over administration in 1767. Sugar planting was the main industry, and the colony prospered. During the wars between United Kingdom and France, Île de France was a threat to British shipping. In 1810 the British captured the island, and kept it under the terms of the Treaty of Paris in 1814. The customs, laws, and language remained French, but the name Mauritius was reinstated. The British abolished slavery in 1835 and the slaves were replaced by Indian laborers. In the late 1800s Mauritius declined because of competition from beet sugar, a malaria epidemic in 1866-68, and the opening of the Suez Canal in 1869. The Suez Canal provided a more direct shipping route from Europe to the Indies. During the First World War, sugar prices rose and the economy prospered, but the economy went into depression in the 1930s, leading to labor unrest in 1937. Mauritius became from the United Kingdom on 12 March 1968. After independence, Mauritius initiated a successful program to develop a textile export industry; it has since moved into more sophisticated industries and tourism to further diversify the economy. Mauritius has remained democratic since independence.

Wars since 1500

Napoleonic Wars, 1810; Second World War, 1939-1945 (no battles, but affected by danger to shipping; also, Mauritius involved as a launching point for the British invasion of Madagascar).

Convertibility

The sterling area:

On 2 August 1914, soon after the First World War began, the United Kingdom issued a proclamation imposing a one-month moratorium of payment for bills of exchange accepted before 4 August; an act of 3 August 1914 gave legislative sanction to the proclamation. The moratorium was subsequently extended for a month and ended on 4 November 1914. Legally the pound sterling remained convertible into gold and could be exported, but the risk to shipping from German submarines made the cost of shipment prohibitive, so the United Kingdom was in effect off the gold standard. The British government refused to include private shipments of gold in its war-risk insurance scheme. After the war, the export of gold was prohibited from 1 April 1919 under regulations that were given statutory form in 1920. On 28 April 1925 the government announced that the act would not be renewed when it expired on 31 December 1925. On 13 May 1925 the United Kingdom resumed the gold standard.

The United Kingdom abandoned the gold standard on 21 September 1931. The currencies of British colonies were almost all linked to the pound sterling through currency boards; being on a sterling-exchange standard rather than a gold-exchange standard, they followed the pound sterling off gold. Over the next few years, some former British colonies (Australia, New Zealand, South Africa) and other countries that had important trade links with the United Kingdom switched from gold to the pound sterling as their official or actual anchor. The result was termed the sterling area. The United Kingdom imposed exchange controls on 4 September 1939, the day after entering the Second World War. Most countries that were not current or former British colonies soon left the sterling area. Among the remaining countries, both current- and capital-account transactions were free of restrictions within the sterling area, but were restricted in dealings with outside countries. After the Second World War, the United Kingdom returned to the gold standard under the Bretton Woods system. It removed exchange controls on 15 August 1947, but reimposed them on 20 August 1947 after suffering a large loss of foreign reserves. Sterling had a dual exchange rate from 1961 until the United Kingdom abolished exchange controls. The sterling area remained in existence because sterling was not fully convertible. It began to crumble after the United Kingdom again abandoned the gold standard on 23 June 1972. By January 1973 the sterling area had shrunk to the British Isles and a few small British colonies; even Hong Kong had abandoned sterling as its anchor currency. The United Kingdom abolished exchange controls on 24 October 1979, ending the sterling area.

Mauritius alone:

Mauritius left the sterling area on 23 June 1972.

Other

Defaults on or restructurings of debt to the private sector (mainly from Purcell and Kaufman 1993 and Standard & Poor's 2004): None.

Reinhart and Tokatlidis (2000: 33) dating of recent financial liberalization: Domestic (notably interest rates) 1993, external (notably foreign-exchange market and participation by foreign financial institutions) 1993.

Banking crises (data since 1970s mainly from Caprio and Klingebiel 1999 and Frydl 1999): Moderate problems in 1996, when the central bank closed two of the 12 banks.

Frankel and Rose (1996) list of currency crashes: None.

References

Primary sources:

--Laws and decrees:

Great Britain (United Kingdom). Gazette. 1665-present. Oxford Gazette (1996-1666); London Gazette (1666-present). Oxford (1665-1666); London (1666-present): His/Her Majesty's Stationery Office from 1903. Online at <http://www.gazettes.online.co.uk>; as of September 2005, gazettes since 1900 are available.

Mauritius. Gazette. 1820?-present. New Mauritius Gazette / Nouvelle gazette de Maurice (1820-?); Gazette de Maurice / Mauritius Gazette (?-1832); Mauritius Government Gazette (1832-1915); The Government Gazette of the Island of Mauritius (1916-1932, may have continued under this title to 1947); The Government Gazette of the Colony of Mauritius (1947-1968); Government Gazette of Mauritius (1968-present). Port Louis: Government Printer.

--Publications of monetary authorities:

Bank of Mauritius. Annual report. 1967/1968-present. Annual Report for the Year Ended June ... (1967/1968-1994); Annual Report, Year Ended 30 June ... (1995-present). Port Louis: Bank of Mauritius.

Bank of Mauritius. Bulletin. 1979-present. Quarterly Review. Port Louis: Bank of Mauritius.

--Web site of the current monetary authority (viewed 20 September 2005):

<http://bom.intnet.mu>

--Other publications or Web sites:

Great Britain (United Kingdom). Annual report on Mauritius. 1920-1938, 1946-1967. Colonial Office, Mauritius: Report for 1920 [etc.] (1920-1930); Annual Report on the Social and Economic Progress of the People of Mauritius (1931-1938); Colonial Office, Annual Report on Mauritius for the Year ... (1946-1966); Commonwealth Office, Annual Report on Mauritius for the Year ... (1966-1967). London: His/Her Majesty's Stationery Office. (Contains slight information on the currency board.) (This series was called Colonial Reports until the Second World War and Colonial Annual Reports afterwards; it was suspended during the war for most colonies.)

Bank of Mauritius. 1998. "Highlights of Monetary Policy Measures and Other Developments 1967-68 to 1997-98." In Bank of Mauritius, Annual Report, Year Ended 30 June 1998: 9-17.

Main secondary sources:

Baster, A[lbert] S[tephen] J[ames]. 1929. The Imperial Banks. London: P. S. King and Son. (Concerns banks incorporated mainly in London whose branch networks were elsewhere in the British Empire.)

BCEAO. 1966. Banque Centrale des États de l'Afrique de l'Ouest. Notes d'information et statistiques, issue "L'Afrique des monnaies," January 1966. Paris: Banque Centrale des États de l'Afrique de l'Ouest.

Chalmers, [Sir] Robert. 1893. A History of Currency in the British Colonies. London: Eyre and Spottiswoode for Her Majesty's Stationery Office.

IMF ARER. 1950-present. International Monetary Fund. Annual Report on Exchange Restrictions (1950-1978), Annual Report on Exchange Arrangements and Exchange Restrictions (1979-1988), Exchange Arrangements and Exchange Restrictions: Annual Report (1989-present). Washington: International Monetary Fund. (Contains information on IMF member countries and some of their dependencies.)

Lagesse, Marcelle. 1988. 150 Années de Jeunesse: A History of the Mauritius Commercial Bank. Port Louis, Mauritius: Éditions Caravelle.

Leduc, Michel. 1965. Les institutions monétaires africaines: pays francophones. Paris: Éditions A. Pedone.

Mauritius Commercial Bank Limited. 1963. The Mauritius Commercial Bank Limited, 1838-1963. Port Louis, Mauritius: Mauritius Commercial Bank Limited. (Despite the English title, the text of the book is in French.)

Mazard, Jean. 1953. Histoire monétaire et numismatique des colonies et de l'Union française, 1670-1952. Paris: Émile Bourgey.

Zay, E[rnest]. 1892. Histoire monétaire des colonies françaises d'après les documents officiels. Paris: Typographie de J. Montorier. (There also exists an undated reprint edition, perhaps from the 1960s, printed by Protat Frères in Macon.)

Monetary authorities: Mauritius

Note: The early history is taken from the accounts of the early monetary history of Réunion, and the caution there, that I am uncertain about the completeness of the account of the early years of the island's monetary history, also applies here.

Exchange rate arrangements: Mauritius

Note: The early history is taken from the accounts of the early monetary history of Réunion, and the caution there, that I am uncertain about the completeness of the account of the early years of the island's monetary history, also applies here.