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Demand for forex still high as rupee continues to depreciate, price of goods skyrocket | 28 November 2020

Demand for forex still high as rupee continues to depreciate, price of goods skyrocket

Governor Abel (Photo: Anel Robert)

The Central Bank of Seychelles has once again reiterated its call to the general public to be more aware of our difficult economic situation, to relook at their priorities and to buy only what they need as the price of foreign currencies continue to rise thus increasing drastically the price of commodities on the market.

In her weekly meeting with the press yesterday to give updates on the country’s current foreign exchange and economic situation, Central Bank of Seychelles (CBS) Governor Caroline Abel said it is important for all actors in our economy to know and bear in mind the impact this has on our country which depends entirely on importation for the majority of commodities that we use as well as the impact this will have on each and every one of us, our families, businesses, the health sector… as our rupee continues to depreciate and our foreign currency reserve dwindles because economic activities remain non-performing.

She noted that from September to now the price of the dollar has increased by three rupees.

“We have to be conscious that a depreciating rupee impacts on us all but more specifically on lowest paid workers and less fortunate and vulnerable people in our society. Even if we are all aware of the increasing prices of goods in the shops the effect will not be the same on all of us. Some people will feel less affected than others as they have the rupees to buy goods even at very high prices but we should think of others who will not be able to make ends meet and will be left with nothing after buying things like milk and other simple items for everyday use,” said Governor Abel.

Based on the grim economic reality staring at us, Governor Abel stressed that it is paramount that all of us without exception relook at our priorities and think carefully and balance what we need against what we want before making any expenses.

Meanwhile Governor Abel has said the Foreign Exchange Market has remained more or less the same in past weeks with demands for foreign exchange for this month up to November 25 being still high.

Foreign exchange sold during the past week is US $6.7million. For the month of November up to now US $ 3.3 million has been paid to Seypec, US $1.3 to STC and US $4million has been sold in forex auction. The country’s foreign exchange reserves as of yesterday November 27 stood at US $564million and from that US $425 million is available to be used.

Ms Abel noted that it is crucial for each and every one of us to adjust our expenses and priorities to reduce pressure on CBS’s limited reserve so it can last until our economic situation starts to improve.

Ms Abel also talked about the economic impact of the Covid-19 situation on the international foreign exchange market, the optimism for tourism and travel created by the announcement that vaccines for the virus will soon be commercialised.

But Ms Abel noted that in spite of these developments internationally and visitors are trickling in, there is still a lot of uncertainty for small Seychelles as it is yet to see economic activities pick up and the expectation in the country is still high and as a result people do not find the need to change their behaviour.

With regard to the employment sector she said things are still difficult as people are still losing their jobs.

Meanwhile with regard to the private sector MSMEs Relief Scheme, up to November 24, there were 312 requests submitted from which 177 have been approved, 39 are still being processed while 66 have already been rejected. The total value for requests approved stands at R61,006,215.

As for the Private Sector Large Enterprises Relief Scheme up to November 24, eighteen (18) requests have been submitted from which eight have been approved, three requests have been withdrawn and seven applications are still being processed. The total value for requests approved stands at R50 million.

Meanwhile Ms Abel has announced that as from next week technical discussions will start with the International Monetary Fund (IMF). She said these will include data analysis to establish the real financial status of our economic situation before any policy discussions can happen.

Marie-Anne Lepathy

 

 

 

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