- Decision
- Maintain
- Rate change
- 0 bps
- Policy rate after decision
- 1.75%
The Central Bank of Seychelles (CBS) held its Monetary Policy Rate at 1.75% for the second quarter of 2026, maintaining an accommodative stance as domestic prices are projected to rise amid higher oil, freight and shipping costs, while the Middle East conflict creates uncertainty for tourism. Across the provided decisions since the third quarter of 2025, the rate has remained at 1.75%. The Standing Deposit Facility and Standing Credit Facility rates will remain at 0.25% and 3.25%, respectively, while the Minimum Reserve Requirement on applicable rupee-denominated deposits stays at 10%. Year-on-year and 12-month average inflation were both 0.3% in February, while tourism continued to support the economy despite March travel disruptions. Foreign exchange supply growth outpaced demand, contributing to rupee appreciation against the USD, although rising import costs could increase currency demand and weaken the rupee. Globally, the conflict has disrupted aviation and shipping, sharply raised oil prices and increased prospective food and transport costs. CBS will monitor external developments and their pass-through to domestic prices and stands ready to use foreign currency reserves to support orderly foreign exchange market functioning and essential imports 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.