It’s Manou wot lost the municipal elections for government. Well, partly at least. Indeed, according to the prime minister’s rather surreal concession/victory speech, the tough economic climate certainly didn’t help the case of the ruling coalition in front of the urban electorate.

And given that the governor of the Bank of Mauritius’s (BM) pro-purchasing power monetary policy has, according to the minister of finance, shaved a full percentage point off the growth rate, it’s not too much of a stretch to affirm that he played a role in its poor showing.

The real news came on Tuesday however when Xavier-Luc Duval revealed, thanks to the insistent probing of Opposition MP Kee Chong Lee Kwong Wing, that on top of circumventing the BM’s prerogatives by buying up dollars from commercial banks, he paid them a premium for the privilege.

This little operation, which was funded by public money, cost the taxpayer around Rs5.44 million rupees (over and above the Rs265 million spent on actually buying the dollars). For what? Ultimately, to depreciate the rupee for about a week. But don’t be distracted by the figures the real story lies in the obsession of the minister of finance and private sector with devaluing the rupee.

For them this is not simply an economic strategy, it’s a badge of honour. The trouble is that in Rundheersing Bheenick they’ve found not only a resolute adversary but one who is more than their match. A brief recap is in order. Soon after taking on his responsibilities as minister of fi nance, XLD tried to get the governor of the BM to lower the repo rate. The latter resisted by explaining that a previous decrease hadn’t had any notable impact on investment.

Cheekily, he lowered the repo rate by 0.1%. Someone leaked the news to the press before Bheenick could announce it publicly. Ostensibly, the reason for this was to signal that the rupee wasn’t all that hot a placement and thus reduce its value.

The IMF then serendipitously published a report saying that the rupee was misaligned by between 14 and 15%. Duval bandied it to make the case for depreciating the rupee whereas Bheenick went on the record to say that the misalignment was not nearly as high as the IMF said it was. He nevertheless initiated an Operation Reserve Reconstitution to placate those baying for devaluation, only to terminate it once the rupee had lost between 3 to 4% of its value.

Bheenick staunchly defended his policies in a speech given at the Official Monetary and Financial Institutions Forum last month. Duval replied by stating that Bheenick’s decisions had cost the country a percentage point of growth. And, in contravention of the relevant legislation, he launched a tender for the purchase of $100 million, which boosted the dollar at the expense of the rupee. And how exactly have tactics benefi ted the economy in real terms? Marginally, if at all. Not that this will deter the cheerleaders of depreciation. No wonder it’s so easy to blame Manou.

Nicholas RAINER