Seychelles: IMF Executive Board Completes Fourth Review Under the Policy Coordination Instrument for Seychelles


On December 17, 2019, the Executive Board of the International Monetary Fund (IMF) completed the fourth review under the Policy Coordination Instrument (PCI) for Seychelles. [1] The Executive Board's decision was taken without a meeting. [2]

The PCI was approved on December 13, 2017 (see Press Release No. 17/492). Seychelles was the first IMF member country to request a PCI, since the Executive Board of the IMF approved the PCI as a new non-financing instrument to further enhance the effectiveness of the Fund's toolkit.

Macroeconomic performance continued to be strong in 2019. Economic growth is estimated to reach around 4 percent, reflecting strong output in the tourism and communication sectors. Inflation has been on a declining trend since early 2018.

The gross international reserves remain at an adequate level. The Central Bank of Seychelles (CBS) lowered the monetary policy rate at end-September 2019, citing benign inflationary pressures in the coming months. Program implementation is largely on track, while the 2020 budget submitted to the National Assembly is in line with the program. The near-to-medium-term economic outlook continues to be favorable, provided that the authorities maintain their prudent policies under the PCI.

The authorities are committed to the primary fiscal surplus target of 2½ percent of GDP through 2022, by steadily reducing the public debt-to-GDP ratio over the medium term and implementing permanent measures envisaged in the 2020 budget.

The government intends to keep a very tight rein on Air Seychelles' financial position. The CBS is committed to a flexible exchange rate, while being vigilant to both upside and downside risks to inflation. The structural agenda focuses on strengthening the AML/CFT framework, buttressing financial stability, and enhancing inclusive growth, including by improving the business climate.

[1] The PCI is available to all IMF members that do not need Fund financial resources at the time of approval. It is designed for countries seeking to demonstrate commitment to a reform agenda or to unlock and coordinate financing from other official creditors or private investors. (see

[2] The Executive Board takes decisions without a meeting (based on lapse-of-time procedures) when it is agreed by the Board that a proposal can be considered without convening formal discussions.

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