Wednesday, May 27, 2009

Seychelles: Reforms boost confidence in rupee

19.05.2009

Seychelles is convinced that its revamped monetary framework will provide the basis for increased confidence in the rupee and stability in the banking sector.

President James Michel said this yesterday when he opened a forum at which local and international partners talked about our economic reforms.

He said the Central Bank has contained the inflationary effects of floating the rupee by adopting a tight monetary stance.

“I am pleased to note the rupee has stabilised at just over R14 to the dollar. This is a significant reduction from the R18 to the dollar in November last year,” he said.

He said interest rates on treasury bills have dropped 11 percentage points in the last four weeks and we are starting to see a reduction in market interest rates, which will help businesses as well as mortgage holders and bring benefits throughout the economy.

Mr Michel said the fact that we have negotiated a 45% write-off of our Paris Club debts and a rescheduling of the rest over 18 years at sustainable rates of interest marks the confidence the international community has in our reforms and the level of transparency with which we have addressed the process of debt reduction.

“We understand this exceptional agreement is unprecedented for a country such as Seychelles,” he said.

“And as we enter discussions with our private creditors we appreciate the understanding of all partners in this process.”

He said the fact that several partners, including the European Union, are moving towards budget support for Seychelles as the main aid mechanism is a further mark of confidence in our reforms.

“We are gratified that our commitment to transparency is recognised in this way. It is also a symbol of understanding the specificities of small islands,” he said.

“Although we still have much to accomplish, the tangible results are already beginning to appear.

“These are turbulent times around the world. And every Seychellois knows that the best way to ride this storm is to come together and offer each other support. The vast majority of our population has come to realise that continuing with our old ways was simply not an option for us. Change had to come. We have had the strength and courage to unite behind a single vision.”

Mr Michel told the delegates that the security risks posed by the sudden upsurge in acts of piracy in the Indian Ocean have added a new dimension to our vulnerability, and piracy is perhaps the biggest immediate threat to our economy.

“I strongly believe that enhanced coordination will play a key role in the fight against this scourge. I ask all our partners to bear this in mind over the course of our discussions,” he said.

“I have always believed in the possibility of changing challenges into opportunities. I am convinced that with your support, we will succeed.”
He said yesterday was another occasion where we stood before our friends and asked them that our special situation be understood.

Among the Seychellois who attended the launch of the forum were Vice-President Joseph Belmont, Speaker of the National Assembly Dr Patrick Herminie, Chief Justice Ranjan Perera, government ministers, Chief of Defence Forces Brigadier Leopold Payet, Attorney-General Ronny Govinden, leader of the opposition in the National Assembly Wavel Ramkalawan and MNAs, Peter Larose of the World Bank and Central Bank governor Pierre Laporte Foreign guests included Qatari Minister for Municipalities and Urban Development Sheikh Abdul Rahman bin Khalifa Thani, European Union commissioner for fisheries and maritime affairs Joe Borg, Paul Mathieu of the International Monetary Fund, John Anyanwu of the African Development Bank and Sindiso Ngwenya, secretary-general of the Common Market of Eastern and Southern Africa, as well as members of the diplomatic corps.