- Decision
- Maintain
- Rate change
- 0 bps
- monetary policy rate
- 1.75%
The Board of the Central Bank of Seychelles (CBS) left the Monetary Policy Rate (MPR) unchanged at 1.75 % for the first quarter of 2026, judging the current accommodative stance appropriate as domestic inflation remains subdued and activity is buoyed by a robust tourism recovery. The MPR has been held 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 %, respectively, while the minimum reserve requirement remains at 10 %, sustaining ample liquidity after its reduction in October. Year-on-year inflation eased to 0.02 % in November, with 12-month average inflation at 0.5 %, though CBS anticipates a gradual pick-up ahead, citing a softer Seychelles rupee and higher global food costs. Visitor arrivals reached 361,422 by end-November, up 12 % on 2024, lifting foreign-exchange inflows, yet FX demand has risen faster, leading to rupee depreciation that could persist if import needs keep outstripping supply. Internationally, major central banks have shifted to a more accommodative bias amid declining global inflation, while oil prices have fallen and food prices climbed, with geopolitical tensions adding uncertainty. CBS pledged to remain vigilant and stands ready to adjust its policies in response to evolving conditions.
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.