- Decision
- Maintain
- Rate change
- 0 bps
- monetary policy rate
- 1.75%
The Central Bank of Seychelles (CBS) kept its Monetary Policy Rate at 1.75 % for Q2 2025, citing the need to sustain domestic activity amid subdued but expected-to-rise inflation and elevated global uncertainties. It also held the overnight deposit rate at 0.25 %, the lending facility rate at 3.25 %, and the minimum reserve requirement at 13 %. Year-on-year inflation slipped to −0.1 % in February, with the 12-month average at 0.6 %, while the bank foresees a medium-term pickup. First-quarter growth remained tourism-led despite a 3.5 % y/y drop in arrivals to 78,537 by mid-March and lower tourism receipts, though new flights and international sporting events are expected to bolster the sector later in the year. Foreign-exchange inflows and demand both surpassed year-earlier levels, yet stronger demand weakened the rupee against the USD even as it firmed versus the EUR. Food prices continue to climb globally, oil prices eased in March on expectations of higher supply, and the outlook is clouded by U.S. policy shifts, trade frictions and ongoing conflicts; the IMF projects 2025 global growth of 3.3 % and inflation of 4.2 %. The CBS said it will continue to monitor developments and adjust policy if necessary to remain aligned with its objectives.
Rate evolution
From June to December 2025, the Central Bank of Seychelles kept the Monetary Policy Rate unchanged at 1.75%, maintaining an accommodative stance, while cutting the Minimum Reserve Requirement to 10% from 13% in October to support liquidity and credit. Initially, the Board cited tourism as supporting activity but emphasised external vulnerability, with low inflation expected to rise gradually and geopolitical conflicts, tariff measures and commodity-price risks seen as threats to tourism, foreign exchange supply and imported prices. By October and December, lower oil and freight costs, easing foreign inflation and a more accommodative but uneven global backdrop reinforced the case to hold, even as the Seychelles rupee weakened because foreign exchange demand outpaced supply despite visitor arrivals and earnings. In December, the Board left the policy rate at 1.75% and the Minimum Reserve Requirement at 10%, noting inflation at 0.02% in November but expecting a gradual medium-term increase.
On March 24, 2026, the Board maintained the policy rate at 1.75% and the Minimum Reserve Requirement at 10% for the second quarter, noting that inflation had risen to 0.3% in February but remained relatively low, while the Middle East conflict disrupted tourism and raised oil, freight and shipping costs. At its June 19 meeting, the Board held both settings for the third quarter, citing the inflation outlook and geopolitical uncertainty as tourism continued to support foreign exchange inflows despite lower arrivals and earnings, the Seychelles rupee depreciated amid increased demand, and both year-on-year and 12-month average inflation stood at 0.3% in May, with import costs and potential currency weakness expected to raise domestic prices.