Central Bank warns of rise in spending while inflows drop
The Central Bank has warned that spending in Seychelles continues to rise putting pressure on forex reserves, while inflow continues to drop.This situation is a concern as we look ahead, said the CBS Governor Caroline Abel in a press briefing recently.
The high exchange rate being recorded reflect the above and the rate for purchase of USD & EUR are now at its highest at R18.34 and R21.94 respectively and it is expected to rise if there is no improvement in the supply of foreign exchange on the local market.
Abel explained that despite a drop of R3.8 million in the demand for foreign exchange, the appetite for same remain on the high side and she noted that the supply of foreign exchange on the local market continued to follow a downward trend, precisely from USD 8.5 million on August 6, 2020 to USD 6.5 million on August 14, 2020.
From April to August a total of USD 6 million and USD 7.2 million was sold to the Seychelles Trading Company (STC) and Seychelles Petroleum Company (Seypec) respectively from the international reserve and as at the period under review Gross International Reserve (GIR) was USD 588 million and Net International Reserve (NIR) was USD 441 million which as forecasted will last for as long as possible.
For the same period a total of USD 17 million was sold through the foreign exchange auction to the commercial banks.
The above are influenced by external factors such as travel restriction, health economic and social issues, effects of the Covid-19, as well as the prices of oil and food.Since the country’s economy is in a transition, the expectations and policy orientation for the com-ing years and beyond has to be in alignment so that the country can survive and bounce back from the situation, CBS says.
HELPING SME
Meanwhile the country is trying its best to sustain the economy and businesses being affected by providing relief scheme to the micro, small and medium enterprises (MSMEs) and large enterprises.
The purpose of the scheme is to assist eligible MSMEs and large enterprises facing financial constraints resulting from the Covid-19 pandemic, in meeting critical expenditures, including, but not limited to rent, utilities (including telephone/internet expenses), salaries, taxes, insurance, goods and services contracts, redundancy costs and the department of health’s sectoral guidelines for workplaces.
For the MSMEs, the total request received was 219, of which 91 have been approved (to talling to R28,134,466.00), 54 have been rejected, while 74 are still pending.
As for the large enterprises, the total request received was 9, of which 1 has been approved (totaling R2 million), 2 have been withdrawn, while 6 are still pending.
MORATORIUM
There is also a moratorium of up to three months for individuals and up to six months for business-es on repayment of principal and/or interests on loans and for this, individuals and businesses need to approach their respective banks for an assessment of their requirements and financial position.
New applications are still being entertained for individuals and businesses that are only now feeling the impact of the pandemic.
Source: nation.sc
