Europe’s progress against COVID-19 good for Seychelles, but Central Bank has wary eye on variants
The easing of COVID-19 restrictions in Europe thanks to nations’ rising vaccination numbers and falling infection rates will have positive effects on tourism in Seychelles, said a top official.
However, the governor of the Central Bank of Seychelles (CBS), Caroline Abel, told a press conference on Friday that new variants of COVID-19 still threaten global travel and the island nation’s economic recovery path.
“Recently we have heard about the new variant in Vietnam and we are keeping an eye on the decision taken by other countries as it will also have an impact on us and the decision that we will take,” said Abel.
Tourism, which is the top pillar of the economy of Seychelles, an archipelago in the western Indian Ocean, was badly affected by the downturn in travel caused by the COVID–19 pandemic.
On the international commodity price outlook, Abel said that food prices are expected to increase due to rising demand, potential supply disruptions and shipping constraints.
She added that oil prices are expected to rise on the prospect of higher demand although this is subject to uncertainty.
On the domestic front, Abel said that CBS is keeping a close eye on the labour dynamics, “its impact on disposable income and concerns on skill mismatch as all will have an impact on how the economy progress.”
According to CBS, on Wednesday a dollar on average was 16.57 and a Euro 20.34. This represents a reduction of 0.2 percent on the dollar and an increase of 0.3 percent on the euro.
“These figures are an indication that the foreign exchange market is remaining quite stable with slight changes in the rate,” said Abel.
To date, the country’s reserves stand at $564 million and the amount that can be used is $405 million. The calculation shows that this reserve will last the country for about 18 months.
“Just like it is the case most of the time when we talk about our resources, we maintained that we need to use it efficiently,” said Abel.
Abel said that the key message of CBS remains that although there are signs of economic activity, it is still low as “there are different frictions still in existence and we need to adjust our policies to changes.”