Extended Fund Facility (EFF) for Seychelles-IMF approves sixth review and releases US $2 million |20 December 2012

This follows the IMF executive board’s sixth review under the facility.

This new sum will bring total disbursements under the arrangement to US $30.5 million. 

The executive board has also approved an extension of the arrangement by one year to support the country’s economic reform programme and an augmentation of access by 60.6 percent of quota.

The EFF, amounting to US $31.1 million, became effective on December 23, 2009.

Following the executive board’s discussion this week, Min Zhu, deputy managing director and acting chair stated that economic growth in 2012 has held up, with tourism from new markets offsetting weakness in traditional European arrivals.

He also noted that an uptick in inflation in the first half of the year emanating from higher energy prices and exchange rate depreciation has been successfully curbed by tight monetary policy; and although the outlook is benign, it remains vulnerable to the uncertain global environment.

Mr Min Zhu advised that given the difficult global environment and rising debt service, the authorities should aim to build buffers by increasing international reserve holdings, and they should take a cautious approach to contracting new loans.