Question: Describe how the three transactions below would affect the exchange rates of the Mauritian rupee, assuming that Mauritius has a free floating exchange rate regime:

Describe how the three transactions below would

Describe how the three transactions below would affect the exchange rates of the Mauritian rupee, assuming that Mauritius has a free floating exchange rate regime: (1) Oxenham Ltd imports a year's supply of French champagne. Payment in euros is due immediately. (i) Omnicane(a local company) has successfully privately placed a bond issue of USD 100m to foreign institutional investors. The first coupon is due in six months' time and the rate of interest is 2% per annum. The proceeds have been used to repay a commercial bank for a USD bank loan which came to maturity. (ii) Air Mauritius (MK) buys a Boeing 747 for USD 160 million. As part of the deal, Boeing arranges a loan to MK for the purchase amount from the U.S. Export-Import Bank. The loan is to be paid back over the next ten years with a two-year grace period

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