Foreign exchange market remained stable in 2022 |06 January 2023
With the positive upturn in the tourism sector throughout 2022, revenues have improved significantly, a major contributing factor towards the stability of the foreign exchange market.
According to records of the Central Bank of Seychelles (CBS), there were higher foreign exchange inflows and outflows over the course of the year, with supply at USD ($) 846 million as at December 28, representing a 46 percent increase from the same period in 2021.
Demand up until the same timeframe was also 46 percent higher than the previous year, at $856 million.
For the month of December alone, $74 million was supplied to the market, while demand stood at $71 million. As expected, the tourism sector is the biggest contributor with 36 percent of supply stemming from the sector, followed by fisheries and the ship chandler sectors.
On the other hand, demand remains the highest in the wholesale and retail sector, accounting for 22 percent of total demand in December, while the petroleum sector accounted for a total 14 percent of demand, and telecommunications 6.9 percent only.
Interestingly, the tourism sector in December represented only 3.9 percent of the total demand for foreign exchange.
“This is an indication that our local currency remained more or less stable in 2022, supported by the tourism sector,” Governor Caroline Abel noted during a press briefing last week.
As at December 29, a USD stood at Seychelles Rupee (SCR) 14.11 while the Euro (€) was at SCR 14.91.
Within the week starting on December 22 up to December 28, supply was lower than previous weeks of the month, at $14.1 million, while demand was at $14.6 million. The three previous weeks of December saw supply exceeding $15 million and demand exceeding $16 million, reaching $20.1 million in the week starting December 8, and $20.4 million during the week from December 15 to December 21.
As at December 28, the country’s foreign exchange reserves were at $637 million, $470 million of which can be used.
Laura Pillay