I have created a paypal account but I dont understand how to make payment for buying something.

Your Paypal balance will remain zero unless you transfer funds from your bank to it or if someone sends you money. It's best to leave the balance as zero so that you do not lose on currency conversion. This means currency will be converted only when you make a purchase and that's done by Paypal when you checkout.

When you buy something with Paypal, it checks whether you have any balance in your Paypal account that could be used for the purchase. If you don't have any balance, it then tries to get the money from the bank that you linked to your paypal a/c. The conversion of currencies is done by paypal itself, so you don't have to worry about this.

The transaction can be rejected if you do not have sufficient funds in your bank though.

I don't quite understand your problem.
But here's what I have to say.

Your paypal account has a balance of 0. This is normal because you haven't done any transaction yet. Your limit in Paypal is your limit given by the bank. For e.g. bank limit is Rs10,000, Paypal also will be Rs10,000. You have to pay your bank at the end of each month. But this won't appear anywhere on your paypal account.

Payments are automatically converted to other currency. There is no website in the world apart from Shirts.mu that accepts Mauritian Rupees. Besides, you cannot convert money online!