The big news out this morning is that Mauritius plans to set up a new SWF. According to Finance Minister Pravind Jugnauth, the new fund will be worth about $500 million and draw its assets from currency reserves:
“To ensure greater stability in the forex market, the government is creating a sovereign wealth fund that will be invested in a range of asset classes abroad.”
This announcement has been expected for some time. Back in March, I noted that wild currency fluctuations had put the idea of a new SWF on Mauritian radar:
“Over the past two years, the Mauritian rupee has experienced a great deal of volatility vis-à-vis the dollar; down over 11 percent in 2008 and then up nearly 5 percent in 2009. This has made long-term budget planning very difficult. As such, the new SWF is meant to help smooth exchange rates (ostensibly by facilitating central bank operations and sterilization) so the government can be more certain about the country’s long-term economic plans.”
That seems eminently wise. And so, with the official announcement, I’d like to personally welcome Mauritius to the SWF club. And when I say, “personally”, I mean I’d like to come to Mauritius, in person, for some sort of SWF launch event or conference or whatever. We can call it ‘field work’ or ‘close dialogue’ or whatever passes enough muster to get me a week “working” in this remarkably beautiful country. Have you seen this place? Amazing.