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Inflation rate in MRU (CPI)

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Inflation rate in MRU (CPI)

Beitragvon Joe » Di Jan 11, 2011 20:49

Hi all,

have read these days that the inflation rate (Consumer Price Index) in MRU was in the last 5 years at around 8.9% yearly .

That means an item which was sold in 2006 for 100 Rupees is now at around 140 Rupees.

The currency (Rupees) itself has lost slightly of value compared to Euro and US$ in this time. But by far not as much as the inflation rate . So the inflation in this height is not related to the currencies loss of value !

Gruss, Joe
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Re: Inflation rate in MRU (CPI)

Beitragvon dunno » Di Jan 11, 2011 23:56

Mauritius imports most of it's goods from India, China, France, Germany, and South Africa. India, China and South Africa have strong currencies relative to the MUR. Mauritius's main export partners are the UK, EU, and USA so the MUR has to remain weak relative to the export countries to maintain competitiveness, thereby increasing the cost of imports which are predominantly from China and India. Commodities, which are at a all time high, are generally priced in US dollars which has been devalued extensively relative to the USA's main trading partners.

In conclusion,the deliberate devaluation of the MUR currency also contributes to CPI inflation.

CPI (Inflation) is relative to YOUR basket of goods, granted that some items are common to all income groups. Inflation of the low income sector is measured and applied as the official inflation rate. Inflation for the wealthy will be much higher as the price of their basket of goods increases at a higher rate. Commodities like gasoline, diesel, gas, and electricity are basic necessities for all, oil is almost at 100$US a barrel, this is reflected in the increase of electricity tariffs by approximately 10% on the 1st Dec 2010, if other basic commodities also rise by 10% then the inflation rate IS 10% irrespective of what the government says. Governments will always state the lowest inflation rate they can conjure up, part lie part truth, they can and do cook the books so as to appease their voter base.


Trade info below.
http://www.gov.mu/portal/site/cso/menui ... 8a0208a0c/
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Re: Inflation rate in MRU (CPI)

Beitragvon seashore » Di Feb 08, 2011 3:03

10% is quite a high interest rate. I didn't realize it was that much. Most of the world's currencies are experiencing high inflation right now, so I guess the change isn't that extreme, relatively.
Chris Rogers / Expatriate Insurance Adviser
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Re: Inflation rate in MRU (CPI)

Beitragvon VerniceJ » Fr Jun 17, 2011 9:28

I heard this news that talks about economic crisis nowadays. Each year, we experiences different problems including economic crisis. Aside from the fact that almost all of us are not receiving high salary, we are really affected by this. But, in the news they also mentioned that a small increase in national consumer costs nearly covered up the fact that manufacturing and confidence are in the gutter. The speed of recovery is glacial. All of this points to more consumer inflation, economists claim. I found this here: Signs in place that consumer inflation is here to stay
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Re: Inflation rate in MRU (CPI)

Beitragvon Joe » Fr Jun 17, 2011 19:27

Hi,

I was im March with my family in Europe and when we returned in April, my wife told me that she was very suprised that the price level in european supermarkets (Germany, Luxembourg, France) is currently equal and for some items even clearly less (electronics, home apliance etc.) than in Mauritius.

As Europe is well known for the European "Customs Wall", that should prevent that to cheap items from the world market create competition, the question arises why are the goods in Mauritius so expensive. The Mauritian custom rates are lower than ever ... it looks like the importers, distributors etc. are controlling the market. Monopolies are quite common here.
Gruss, Joe
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Re: Inflation rate in MRU (CPI)

Beitragvon dunno » So Jun 19, 2011 13:59

seashore hat geschrieben:10% is quite a high interest rate. I didn't realize it was that much.

Firstly it isn't a "Interest rate" It's 10% INFLATION which has a completely different meaning and the concept is COMPLETELY different to "interest rate".
seashore hat geschrieben: Most of the world's currencies are experiencing high inflation right now

Most world currencies are not experiencing inflation, SOME are experiencing DEVALUATION, fast becoming FIAT currencies, i.e. less buying power. The countries that have good credit ratings and are not "printing" paper money with which to counter their recession have strong currencies, and hence benign inflation.
Paper money can become worthless due to a governments mismanagement of MONETARY and FISCAL policies, i.e. a FIAT economy.
(the US$ was one of the last currencies to delink from the "Gold Standard" in the "Bretton Woods" agreement in 1971).
(see link for Bretton Woods agreementhttp://en.wikipedia.org/wiki/B ... ods_system).

seashore hat geschrieben:so I guess the change isn't that extreme, relatively.

Really ?.
Please read up on some fundamentals before sprouting rubbish.

Because paper money is NOT linked to a valuable commodity, e.g. gold, it doesn't have intrinsic value. Paper money has "value" based on primarily a countries Monetary Policy, Fiscal Policy, Deposit Interest Rates, Debt to GDP ratio, and the countries ability to repay its debt. All of these are summarised by the credit rating of a country, (AAA, or A+, or BBB, or B+, etc.). Mauritian money has some value right now but future value will depend on the Mauritian Reserve Bank retaining it's current rating internationally, that "International Rating" is worth it's weight in gold, (pardon the pun). If Monetary and Fiscal policies are good then Interest rates on deposits is a major factor contributing to the strength of a currency. Mauritius inflation is at 10% because the Mauritian reserve bank has allowed deposit interest rates to DECREASE so as to devalue the Mauritian rupee relative to its main export trading partners which are primarily the UK, Europe, South Africa, and the US, they have in turn devalued their currencies, BUT... Mauritius IMPORTS from China and India (strong currencies), plus, the price of commodities is at a all time high, the year on year increase was 24%, this disparity between expensive imports and lower export revenue is the primary source of inflation for Mauritius, then factor in the price gouging by the greedy middle men in Mauritius which Joe mentioned above.
(go here for trade balance http://www.gov.mu/portal/site/cso/menui ... 8a0208a0c/)

For the governments bullshit version of inflation go here http://www.gov.mu/portal/goc/cso/ei664/toc.htm
Note how they use the term "weighted index", this is official speak for "we have manipulated the constants to suit ourselves", also note what the basket of goods is comprised of that they base their inflation on. Note also that those weighted constants have smoothed over the 10% increase in electricity from December 2010 and January 2011, in short, the government manipulated the official CPI to suit itself so as to not allienate it's voter base, but anyone with half a brain and a 20 cent calculater can determine for themselves what their real inflation is, that's if they bother to put down the beer and ignore that silly sport where a white ball is kicked around by sultry overpaid teenagers.

To Summarise;
All paper money is based on the "Manure Standard", it's just the smell which differs.

Commodities should be regarded as a alternative currency which is used as a safe haven by "Investors" so as to retain the value of a portfolio and to counteract the effects of currency devaluation (when world reserve currencies devaluate, scarce commodities appreciate). When a country resorts to "FIAT policies" with which to try and balance its books it risks rendering its paper money worthless and this cycle of devaluation could lead to hyper inflation, (Germany pre WWII, and currently Zimbabwe).
Coins will always have some value as they are made from a metal (commodity) which always has value, the scarcer the commodity that the coin is made from the higher the value of the coin.

The first instance of recorded inflation occurred during Roman times. When the Romans were running out of funds (gold) due to all their expensive wars they decided to "stretch" their gold reserves, they diluted the gold coins with a cheap metal, once people realised that the so called new gold coins weren't pure gold any more the price of goods went up, i.e. one sheep = two news coins = one old coin, and voila INFLATION, hence the reason why folks would bite a gold coin as a means of authentication.

The Americans are now in a similar position to which the Romans were then, the parallels are stark, and we all know what happened to the Roman Empire....
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