IMF Staff Issues an Interim Performance Update to the Board on Seychelles’ Policy Coordination Instrument (PCI)
IMF News, August 19, 2020
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- IMF Staff Issues an Interim Performance Update to the Board on Seychelles’ Policy Coordination Instrument (PCI)
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Bibliographic details
- Published: August 19, 2020
Key facts and timeline
- Press Release No. 20/283
- Date: August 19, 2020
- IMF Communications Department; PRESS OFFICER: Lucie Mboto Fouda
- Emergency financing approved by the Executive Board on May 8, 2020 under the Rapid Financing Instrument (RFI) of SDR 22.9 million, equivalent to 100 percent of quota (IMF Country Report No. 20/170).
- The update concerns the 5th review under the Seychelles PCI-supported program.
- A performance update is issued when a review cannot be completed within 3 months from the scheduled date and provides an overview of economic situation, program performance, sources of delay, and corrective actions needed.
Program performance and quantitative targets
- All end-December 2019 quantitative targets for the 5th review were met.
- This includes the inflation rate.
- This includes the floors on the primary fiscal surplus.
- This includes the floors on net international reserves.
- The fiscal target for end-June 2020 was pushed out-of-reach by the COVID-19 pandemic.
COVID-19 impact and policy response
- The COVID-19 pandemic had an unprecedented economic impact on Seychelles through strict domestic containment measures and related global spillovers.
- Authorities responded with measures to mitigate the economic fallout on businesses and households.
- To address urgent balance of payments needs arising from the pandemic, the Executive Board approved RFI financing of SDR 22.9 million (100 percent of quota) on May 8, 2020.
Structural reform progress
- The reform target on the legal framework for a risk-based approach to Anti-Money Laundering/Combatting the Financing of Terrorism (AML/CFT) supervision was met in March 2020.
- The reform target on the legal framework to strengthen entity transparency was partially implemented in April 2020.
- Other review targets were delayed.
Fiscal risks and contingent liabilities
- The government is discussing financing options for the large liabilities of Air Seychelles with the other shareholder with a view to minimizing fiscal risks.
Looking ahead — policy recommendations
- The authorities would need to identify fiscal saving measures to shore up medium-term fiscal consolidation in view of the substantial risks to debt sustainability.
IMF Staff performance update to the Executive Board on the 5th Review under the Seychelles PCI-supported program.