- Decision
- Maintain
- Rate change
- 0 bps
- monetary policy rate
- 1.75%
The Board of the Central Bank of Seychelles kept the Monetary Policy Rate at 1.75 % for the third quarter of 2025, judging that an accommodative stance remains appropriate to shore up a tourism-led economy that is “highly susceptible to external shocks” even as domestic inflation is expected to pick up over the medium term. Having held the policy rate at 1.75 % since at least the second quarter of 2025, the central bank also left the Standing Deposit Facility and Standing Credit Facility rates unchanged at 0.25 % and 3.25 %, respectively, and maintained the Minimum Reserve Requirement at 13 %. Year-on-year inflation in May edged up to 0.4 % while the 12-month average stayed at 0.6 %, and the authority anticipates a further rise ahead; economic activity continues to be underpinned by tourism, with visitor arrivals up 8.2 % on the year to 173,534 by 8 June. Foreign-exchange inflows and outflows have increased, the rupee firmed against the USD but weakened versus the euro in the second quarter, and the bank warns the currency could come under pressure later in the year if import-driven FX demand outpaces supply. Policymakers cite lower global energy prices but persistent food-price gains, heightened geopolitical conflicts and US tariff uncertainty as key external risks, and they reiterate readiness to adjust policy if conditions warrant.
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.