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The Central Bank of Seychelles (CBS) will keep its monetary policy relaxed at 2 percent during the first quarter of 2023. However, it will keep a close watch on international developments for taking quick responses if needed
The Central Bank of Seychelles (CBS) will keep its monetary policy relaxed at 2 percent during the first quarter of 2023. However, it will keep a close watch on international developments for taking quick responses if needed. At a meeting held on December 29, CBS’ board decided to maintain an accommodative stance in its monetary policy rates having taken into account both international and national economic developments.
The bank’s governor, Caroline Abel said that inflation has been an economic point that has worried the whole world in 2022 and maintained that during 2023 also that would continue to be a major concern. Global inflation has gone above the accepted level of 2 percent. This has forced the world’s top central banks – the Bank of England, the Federal Reserve Bank of New York, and the European Central Bank – to tighten their monetary policies.
The European market is one that is of great importance to the tourism industry in Seychelles. With the possibility of a recession on the European continent in 2023, Seychelles’ main tourism markets are expected to have lower spending power. In 2023, global oil and food prices are expected to remain elevated, amidst uncertainties, which will have an impact on the island nation, its central bank observed.
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Talking about the local foreign exchange market, Abel shared that from January to December 28, the amount of foreign exchange that has been sold and bought on the market has been higher this year. An amount of US$846 million was sold on the market, which was 46 percent higher than last year. The country had a demand of US$856 million, which was 46 percent higher than last year. Inflation has also been a point of concern for the local central bank. During the past 12 months, the average inflation rate stood at 3.4 percent.
