- Decision
- Maintain
- Rate change
- 0 bps
- monetary policy rate
- 1.75%
The Board of the Central Bank of Seychelles kept the Monetary Policy Rate (MPR) at 1.75 % for the fourth quarter of 2025, citing the need to sustain accommodative support for the tourism-driven recovery while domestic inflation remains muted and external risks persist. The decision extends a steady rate path that has left the MPR unchanged at 1.75 % since at least the second quarter of 2025. The Standing Deposit Facility and Standing Credit Facility rates stay at 0.25 % and 3.25 %, and, to ease liquidity constraints and encourage lending, the Board cut the rupee-denominated Minimum Reserve Requirement by 300 bp to 10 % effective 8 October. Year-on-year inflation slowed to 0.5 % in September, with 12-month average inflation anchored at 0.6 %, while GDP momentum is underpinned by tourism, reflected in an 11 % rise in arrivals to 283,290 and an 18 % increase in earnings in the year to 30 September. Foreign-exchange inflows and outflows have grown versus 2024, yet the rupee weakened in the third quarter and could soften further if robust FX demand outstrips supply. Externally, oil prices slid to USD 68 in August and the ECB, Bank of England and US Federal Reserve each lowered policy rates by 25 bp in recent months, but the CBS warns that geopolitical tensions and shifting global policies cloud the outlook; it pledges to remain vigilant and adjust policy if needed.
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.