‘Economic reforms firmly on track’


29-August-2012

The officials during the press conference yesterday

Among those present at Liberty House as they gave updates on how the economy is performing were principal secretary in the ministry Steve Fanny, first deputy governor of the Central Bank Christophe Edmond and the bank’s head of research and statistics Brian Comettant.

“The economic reform programme is firmly on track with growth standing at 2.8%, that of tourism being about 3.1%. Tourism arrivals have gone up by 6% compared to last year,” said Mr Laporte.

He talked of good budgetary performance but noted inflation stands at around 8.5%.

The number of people dependent of social welfare has dropped from around 4,000 to just over 3,000, he said.

“So in general, although the adverse global economic continues to have an impact on our economy, our economic situation is good,” he said, talking of proposed new laws and amendments due meant to better prop the economy.

Mr Laporte said the World Bank has been doing a survey aimed at helping review the structure of utilities tariffs.

Giving updates on the monetary aspect of the economy, Ms Abel noted that 12-month average inflation rate has been 5.9%.

“Increases in general prices were across all categories,” she said later, adding noticeable recent influential factors on the 12-month average included revision of Seychelles Breweries Company products’ prices as well as fuel cost, a 15% revision in tariffs for utilities in mid-May and a near two-fold increase in commercial gas prices in May.

She said as at August 26, 2012, the rupee was traded at an average of R13.01 against the US dollar and R16.25 relative to the euro.

“The year-to-date average compared to that for the year 2011 is depreciation of the rupee by 14% against the US dollar and by 5.2% relative to the euro,” she said.

“However, since the intervention of the Central Bank, there has been an appreciation of the rupee by R2 against the US dollar and R2.14 against the euro compared to the weakest level reached so far this year.  The intervention of CBS was to address excessive volatility in the forex market.

“For the period January 2012 to date, gross purchases or supply of foreign exchange through banks and bureaus amounted to US $281 million which is 2.4% less than for the same period last year. Gross sales or demand amounted to US $316 million or 1.6% lower than in 2011,” she said.

Regarding interest rates, Ms Abel said in July 2012 the effective lending rate was 11.70%, up from 11.62% in the previous month and the highest since November 2010 when it stood at 11.87%.
“The savings rate remained stable at 1.14% since November 2011.  It stood at 1.13% in July 2011.

Interest rate on fixed-term rupee deposits was 4.03% higher than 3.40% in the previous month and 2.43% in July 2011
“Growth in credit to the private sector was by 3.4% in July 2012 compared to the same period in 2011. 

Rupee-denominated loans were up by 5.7% while foreign currency loans declined by 16% in US dollar terms.

“In July 2011, year-on-year overall credit growth to the private sector was by 11%.
She said as of Monday, August 27, international reserves or total gross official reserves stood at US $301 million.

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