Central Bank of Seychelles Role in Seychelles Economy

The Central Bank of Seychelles plays a vital role in the country's economy. It is responsible for maintaining the stability of the Seychellois rupee, the official currency of Seychelles.

The bank's primary objective is to maintain price stability by controlling inflation, which has been relatively low in Seychelles, averaging around 3% in recent years. This has contributed to a stable economic environment.

The Central Bank of Seychelles also regulates and supervises the banking sector, ensuring that banks operate in a safe and sound manner, with a total of 5 commercial banks operating in the country. This has helped to promote financial stability and confidence in the banking system.

By maintaining a stable financial system, the Central Bank of Seychelles has helped to attract foreign investment and promote economic growth, with the country's GDP growing at an average rate of 5% in recent years.

The Central Bank of Seychelles has a rich history dating back to 1974 when the Currency Commission of the Seychelles was formed.

In 1978, the Seychelles Monetary Authority was established, which later transformed into the Central Bank of Seychelles in 1983.

The Government of Seychelles' accounts were initially managed by Barclays Bank International until 1982.

On 29 December 1982, the responsibility of managing the government's accounts was transferred to the Central Bank of Seychelles through the "Central Bank of Seychelles Act 1982".

The "Central Bank of Seychelles Act 2004" amended the previous act and provided for the autonomy of the bank within the Seychellois government structure.

The Central Bank of Seychelles has a robust governance structure in place. The bank is supervised by an eight-person board of directors, chaired by the bank governor.

The board is comprised of highly experienced individuals, with Caroline Abel serving as both the Governor and Chairperson. Christopher Edmond and Jenifer Sullivan hold the positions of First and Second Deputy Governors, respectively.

The board's composition is diverse, with each member bringing their unique expertise to the table. The board members are:

This diverse team of leaders is essential in ensuring the bank operates effectively and efficiently.

The Central Bank of Seychelles has maintained a relaxed monetary policy rate of 2 percent for the last three months of the year. This decision was made based on developments within the Seychelles economy and global happenings.

The first deputy governor of CBS, Brian Commettant, explained that unless there is a drastic change in analytic results, the monetary policy will be maintained at 2 percent for the fourth quarter of the year.

Domestic activities in Seychelles continue to recover, but the level of uncertainties, especially linked with international developments that have direct impacts on the country, are of concern for the Central Bank.

Tourism remains the number one contributor to foreign exchange inflow in the Seychelles economy, followed by professional services, construction, and fisheries.

An increase of 10 percent has been observed in the amount of foreign exchange being exchanged on the market, with an increase of 5.4 percent in the level of demand as compared to last year. The total value exchanged on the market stands at an equivalent of $678 million, while demand stands at $657 million.

The demand for foreign exchange is being driven by the wholesale and retail sector, followed by petroleum, and tourism.

The value of the Seychelles rupee has generally strengthened as compared to last year, despite recent developments – mainly an increase in demand during the second half of the year.

The implementation of monetary policies is a crucial aspect of governance and policies. Central banks use monetary policy tools to control inflation, stabilize the economy, and promote economic growth.

The most common monetary policy tool is setting interest rates. By adjusting interest rates, central banks can influence borrowing costs and spending habits. Lower interest rates make borrowing cheaper, encouraging people to spend and invest.

Monetary policy decisions are often made based on economic indicators such as inflation rates and GDP growth. For example, if inflation is rising too quickly, a central bank may raise interest rates to slow down the economy and bring prices under control.

Central banks can also use quantitative easing, a process of buying government securities to inject money into the economy. This can help stimulate economic growth during times of recession or economic downturn.

The Central Bank of Seychelles has maintained a monetary policy rate of 2 percent for the last three months of the year, a decision based on domestic and global economic developments.

Domestic activities in Seychelles are recovering, but the Central Bank is concerned about uncertainties linked to international developments.

Tourism remains the number one contributor to foreign exchange inflow in the country, followed by professional services, construction, and fisheries.

An increase of 10 percent has been observed in the amount of foreign exchange being exchanged on the market, with an increase of 5.4 percent in the level of demand compared to last year.

The total value of foreign exchange exchanged on the market stands at $678 million, with demand at $657 million.

The country has retained $22 million in foreign exchange since the start of the year, compared to $8.7 million last year.

The demand for foreign exchange is driven by the wholesale and retail sector, followed by petroleum and tourism.

The value of the Seychelles rupee has generally strengthened compared to last year, despite recent developments that have caused a depreciation in its value against the US dollar.

As a country that depends heavily on importation, a strengthening rupee means that less rupee is needed to buy a dollar, reducing the amount of rupees required to buy commodities.