bank started intervening again to correct emerging distortions in the market. so while we, as regulator are playing our part to stabilize the market, you exporters, who are the active participants, are also expected to play yours. you cannot continue to take one - way bets on the exchange rate or continue to try to pull the rug in your direction. it will come as no surprise to close observers of the mauritian economic scene that, in its last article iv consultation mission conducted early this year, the imf finds that our currency is broadly in line with economic fundamentals. so let ’ s stop griping about rupee strength or weakness and take action to minimize currency risks. i have every reason to believe that our operators are beginning to appreciate fully the importance of managing their foreign exchange risk – the organization of this seminar with the support of mexa, the exporters ’ association, and the high turnout, are ample evidence of this. 2010 has been a very good year for our exporters in spite of the fragile recovery in our main export markets. exports by eoes rose by 11 per cent in 2010, nearly four times faster than the 2. 8 per cent growth of 2009. the seafood sub - sector is said to be hauling in a very good catch and the textile sector remains stable, with full order books and recovering markets. however, we are conscious that the export sectors are facing daunting challenges in the wake of the uncertainty still surrounding the global economic environment, and, in particular, our main export markets. from our perspective, risks of subdued growth surround these traditional partners, although there are new opportunities arising in other parts of the world. but it is evident that now is the time, more than ever, for our export operators to rethink their business models to adjust to the new economic order. now, more than ever, is the time for them to re - engineer their operations, achieve sustained rises in productivity and move into new products and new markets! salvation can only come from diversification. geographical diversification, sectoral diversification, and product diversification. diversify, diversify, diversify – that should be our new mantra. this is more of a medium - term challenge though ; the simplest way to start is to learn how to properly manage your foreign exchange risk and this is what you are here for today. let me briefly comment on some misconceptions on the use of derivatives. there are indeed many old wives ’ s tales about derivatives

risk is very much part and parcel of the game of our economic operators. since the revolutionary idea that risk can be managed – which literally transformed the world – man is no longer left to the whims of the gods. the concept of management of risks actually drives modern society, and much of the progress made by man would not have been realized without the notion that risk not only can be managed, but can actually be rewarding. indeed, risk and reward are the two faces of the same coin. the exporters ’ outcries show their extreme vulnerability to the vagaries of global financial markets. at the same time they reflect a certain inability, or should i say reluctance, to seize the opportunity that modern risk management tools offer to mitigate their risk. i do understand your fears – trading in derivatives is quite complex and involves many risks. the memories of the collapse of barings in 1995 and the more recent scandal at societe generale in 2008 are still fresh in the minds of many people. these scandals have nourished the myth surrounding derivatives and their potential for leading to catastrophe. in both these cases, as indeed in the more recent cases like bear sterns and lehman brothers, the problem was not with the derivatives but with the controls those banks failed to put in place. and there was also a failure of regulation and supervisory oversight. today, we are here to talk about risk mitigation through the futures market. some corporates in mauritius, as well as the mauritius sugar syndicate, have traditionally hedged their foreign exchange exposure using forward instruments traded in the over - the - counter market. it is good to know that futures and forwards contracts are both contracts to deliver an asset on a future date at an agreed price but they differ in some respects. futures are standardized and exchange - traded, while forwards are customized and traded over - the - counter. thus futures face an exchange, while forwards face a non - exchange counterparty. furthermore, futures are often margined, while forwards are not. they have significantly less credit risk, and their funding is different. like the forward contract, a futures contract is a guarantee that a certain product will be sold at a fixed price at a certain date. although the proliferation of mysterious - sounding acronyms and the complex trade jargon may indicate a recent origin, the concept is certainly not new. in fact the idea of entering into agreements to guarantee a fixed return in the future is mentioned by aristotle. gillian tett, in her