The Seychellois rupee is one of the best performing currencies against the dollar in Africa
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By the Seychelles press agency
The robust return of tourism activity in the island nation is fueling an increase in the value of the Seychelles rupee against the dollar, making it one of the 10 best performing currencies in Africa this year, according to a financial outlet.
The good news for Seychelles residents: a stronger rupee means lower prices for imports and cheaper foreign goods, the Seychelles Central Bank told SNA on Friday. One downside is the fact that a stronger rupee means higher prices for tourists, a cheap dream trip to Seychelles becomes more difficult.
“The Seychelles rupee has strengthened 2.9% this week to 13.31 against the dollar, taking its gain so far in 2021 to 60% – the best of 146 currencies tracked by Bloomberg globally,” the bloombergquint site said last week.
The Central Bank of Seychelles (CBS) told SNA that since Seychelles adopted a floating exchange rate regime in November 2008, movements in the external value of the rupee should reflect market conditions.
“Therefore, the factors that influence the demand and supply of foreign currency would impact the strength of the rupee against the US dollar. So far in 2021, the supply of foreign currency has been stronger than demand, causing the rupee to appreciate, “CBS said.
The Central Bank added that the easing of entry conditions into the country since March has contributed to an increase in the supply of tourism activity, the main source of foreign exchange.
Seychelles, an archipelago in the western Indian Ocean, reopened its borders on March 25 to revive its tourism industry which has been hit hard by the drop in travel amid the Covid-19 pandemic.
In the latest figures released by the National Bureau of Statistics (NBS) last Wednesday, the cumulative figure for the year for 2021 shows that 105,136 visitors have landed in Seychelles. Compared to 2020, when the figure was around 97,000, the number of visitor arrivals since the start of the year has increased by 8%.
The Central Bank, however, stressed that “demand is expected to pick up towards the end of the year to cover the growth in imports to meet the higher aggregate demand and, therefore, at the level of consumption around Christmas and New Year celebrations.
“Therefore, if the demand for foreign currency exceeds supply over an extended period of time, it will trigger a depreciation of the Seychellois rupee. “