PRESS RELEASE
IMF Executive Board Completes the Second Review Under Seychelles’ Stand-By Arrangement and Approves US$1.4 Million Disbursement
Press Release No.09/246
June 30, 2009
The Executive Board of the International Monetary Fund (IMF) today completed the second review of Seychelles’ economic performance under its two-year Stand-by Arrangement, and completed the latest quarterly financing assurances review. The Board’s decision enables Seychelles to receive a disbursement in an amount equivalent to SDR 0.88 million (about US$1.4 million).
The Executive Board also approved the modification of quarterly quantitative performance criteria, and agreed to establish a schedule of semi-annual program reviews, while maintaining quarterly quantitative performance criteria, and financing assurances reviews.
The two-year SDR 17.6 million (about US$27.3 million) Stand-By Arrangement for Seychelles was approved on November 14, 2008 (see Press Release No. 08/282).
Following the Executive Board discussion, Mr. Takatoshi Kato, Deputy Managing Director and Acting Chair, stated:
“Seychelles’ commitment to reform and prudent financial policies has brought about rapid progress on macroeconomic stabilization. The significant fiscal consolidation effort, backed by the new market-based monetary policy, has restored confidence in the Rupee and helped bring inflation down rapidly.
“Economic policies are geared toward consolidating this progress. The fiscal stance aims to support the disinflation objective and contribute to public debt sustainability, while preserving priority social spending. The market-based floating exchange rate regime is serving the economy well, and monetary policy should aim to maintain interest rates positive in real terms in order to anchor price stability. Efforts should continue to expand monetary policy instruments and modernize the legal and institutional framework for the financial sector.
“Structural reforms are needed to lay a firm foundation for sustained recovery. The authorities have strengthened tax administration and launched a fundamental tax policy reform, which are key to improving the investment climate, reducing economic distortions, and securing fiscal sustainability. Progress has also been made in strengthening public financial management and expenditure control. Further efforts in this direction, including to reinforce financial discipline and accountability in public enterprises, will be essential to ensuring fiscal sustainability and raising productivity.
“Good progress is being made with public external debt restructuring. Following the favorable agreement with the Paris Club, the authorities have shown good faith efforts to normalize relations with all creditor groups. In view of the high public debt level, the authorities are pursuing a debt restructuring with non-Paris Club creditors that is consistent with Seychelles’ limited payments capacity. The authorities should reinforce their debt management capacity, supported by Fund technical assistance,” said Mr. Kato
For the full report click here.
IMF Report on Seychelles July 2009 [861.65KB]
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IMF Managing Director, Mr. Strauss-Kahn, welcomes Seychelles Reform Program. For more details click here.
IMF Press Release [171.69KB]
President James A. Michel delivers address to the nation on the Seychelles Macro – Economic Reform Programme. For more details click here.
President Michel's speech. [59.40KB]
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Ministry of Finance Seychelles (31st October 2008)
Government of Seychelles to continue fostering the healthy development of the country’s offshore financial sector
In order to place our economy on a firm path to recovery, the Government of Seychelles is currently putting the finishing touch on an IMF-supported reform program, the main features of which are as follows:
1) Removal of substantially all foreign exchange controls
2) Strong fiscal policy leading to a substantial primary budget surplus
3) Substantial reduction of subsidies to the parastatal bodies
4) Significant reduction of the workforce employed by the public sector
5) Measures intended to boost the productivity of the private sector by encouraging entrepreneurial spirit, strengthening best business practices and wealth-creating activities.
While we believe those measures will have a positive impact on the growth rate of the domestic economy, we trust they will also encourage additional international direct investment and facilitate the development of the rapidly growing offshore financial services sector of the Seychelles.
It is our Government’s firm belief that the offshore sector makes a positive contribution to our country’s economy, both in terms of revenues and human resources development. In full partnership with SIBA, the Central Bank of Seychelles (http://www.cbs.sc) and the community of corporate service providers, we shall pursue our continuing efforts to grow the Seychelles as an offshore financial centre of substance and integrity.
Stakeholders in need of additional information are kindly invited to contact:
Mr. Ahmed Afif, Principal Secretary, Ministry of Finance
Email: ps-finance@finance.gov.sc or
Mr. Conrad Benoiton, Director General – Securities & Financial Markets, Central Bank of Seychelles
Email: conrad.benoiton@cbs.sc or
Mr. Steve Fanny, Chief Executive Officer, Seychelles International Business Authority (SIBA)
Email: steve@siba.net
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