CBS publishes annual report and international reserves management report for 2020 |31 March 2021
The Central Bank of Seychelles (CBS) has published its annual report for the year 2020.
The publication includes a certified copy of CBS’ Financial Statements and Auditor’s Report for the year ending December 31, 2020, which is based on the outcome of an independent assessment by Deloitte Touche Tohmatsu Limited (South Africa) on behalf of the Auditor General, as per section 19 of the Auditor General Act, 2010, read with Section 47(3) of the CBS Act, 2004.
The annual report provides an overview of performance across the various sectors of the domestic economy in 2020, taking into consideration the impact of external developments.
With the spread of the Covid-19 pandemic across the globe, the Seychelles economy suffered major setbacks from the resulting shutdown of the tourism and travel industry. In addition, global trade was also impacted due to supply-side constraints as producing countries faced significant challenges to maintain production, thus resulting in higher prices.
One noteworthy development was the sharp depreciation of the Seychelles rupee as a result of the sudden and unanticipated decline in tourism earnings while demand for foreign currency remained relatively strong to cater for import requirements. This filtered through all sectors of the economy, thus impacting the purchasing power of consumers and the cost of production domestically.
The weakened economic environment and high level of uncertainty also caused disruptions in the labour market, resulting in a pick-up in unemployment. Given these developments and many more challenges that plagued the domestic economy during 2020, various measures had to be implemented to support the economy and mitigate the financial impact of the pandemic on businesses and individuals.
In conformity with international best practices and its core institutional values, CBS also published its sixth Reserves Management Report. The report reviews developments in the area of international reserves management for the year 2020 and provides the way forward in 2021 and beyond. It gives an overview of the governance and operational arrangements which support the efficient management of the country's international reserves. Furthermore, the
report also covers developments in reserves management activities in the year 2020 and the major challenges faced.
In view of the global pandemic, the Gross International Reserves fell from US $580 million at the end of 2019 to US $559 million at the end of 2020, being the first decline in four years. One of the main factors was the support CBS provided to the domestic economy through the sale of foreign exchange. This is in line with its mandate, to ensure the orderly functioning of the domestic foreign exchange market. A total of US $29 million was sold to the domestic banking system through the foreign exchange auction, in addition to direct sales to the Seychelles
Trading Company (STC) and the Seychelles Petroleum Company Limited (Seypec). This amounted to US $11 million each. In net terms, the level of international reserves declined by 6.9 per cent to US $400 million. This represents the volume available for the country’s usage as per its objectives. In terms of the country’s international reserves adequacy, despite the fall observed, the imports coverage increased from 3.8 months to 5.0 months in 2020. According to the broad rule of thumb, a country's international reserves should cover at least 3 months of
the country's overall import of goods and services. The improvement made was attributed to the decline in the country's level of imports in 2020, as a result of the impact of the global pandemic.
As per the requirements of the CBS Act, 2004, the Central Bank Annual Report and Financial Statements for the year ending December 31, 2020 were presented to the President of the Republic, Wavel Ramkalawan, yesterday by the CBS Governor, Caroline Abel (see separate story on page 3). A copy of the above-mentioned report and statements were also submitted to the National Assembly of Seychelles, in accordance with the Act.
The reports are available on the CBS website via the following links: Annual Report 2020: https://www.cbs.sc/Publications/AnnualReports.html
International Reserves Management Report 2020:
https://www.cbs.sc/Publications/ReservesManagementReports.html
Press release from CBS