Seychelles rupee is among best performing currencies against the dollar in Africa
CBS said that factors that influence demand and supply of foreign currency would impact on the strength of the rupee against the US dollar. (Seychelles News Agency)
(Seychelles News Agency) - The robust return of tourism activity to the island nation is fuelling a rise in the value of the Seychelles rupee against the dollar, making it among the top 10 performing currencies in Africa this year, according to a financial news outlet.
The good news for residents of Seychelles: a stronger rupee means a reduction in the price of imports, and lower priced foreign goods, the Central Bank of Seychelles told SNA on Friday. One downside is the fact a stronger rupee means prices rise for tourists, a dream trip to Seychelles at bargain prices becomes harder.
"The Seychelles rupee strengthened 2.9 percent this week to 13.31 against the dollar, bringing its gain so far in 2021 to 60 percent -- the best performer of 146 currencies tracked by Bloomberg globally," the website bloombergquint said last week.
The Central Bank of Seychelles (CBS) told SNA on Friday that since Seychelles adopted a floating exchange rate regime in November 2008, movements in the external value of the rupee are expected to reflect the prevailing market condition.
"Hence, factors that influence demand and supply of foreign currency would impact on the strength of the rupee against the US dollar. Thus far in 2021, supply of foreign exchange has been stronger than demand, causing an appreciation of the rupee," said the CBS.
The Central Bank added that the relaxation of entry requirements into the country since March has contributed to higher supply from tourism activity, the top primary source of foreign exchange.
Seychelles, an archipelago in the western Indian Ocean, reopened its borders on March 25 to relaunch its tourism industry which was severely affected by the downturn in travel amid the COVID-19 pandemic.
In the latest figures published by the National Bureau of Statistics (NBS) last Wednesday, the year to date figure for 2021 shows that 105,136 visitors disembarked in Seychelles. Compared to 2020 when the figure was around 97,000, the year to date visitor arrivals increased by 8 percent.
The Central Bank has however pointed out that "the expectation is that demand would pick up towards the end of the year to cover for growth in imports to meet higher aggregate demand and, therefore, consumption level around the festive seasons of Christmas and New Year. Hence, should demand for foreign exchange exceed supply over a sustained period, this would trigger a depreciation of the Seychelles rupee."