## IMF Executive Board Approves a US$31.2 Million Purchase in Emergency Assistance to Seychelles to Address the COVID-19 Pandemic

_IMF News, May 8, 2020_

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## Bibliographic details
- Published: May 8, 2020

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### Approval and Financial Terms
- The Executive Board approved Seychelles’ request for emergency financial assistance under the Rapid Financing Instrument (RFI).
- The RFI amount: SDR 22.9 million (about US$31.2 million, or 100 percent of quota).
- Purpose: to meet the country’s urgent balance of payment needs stemming from the COVID-19 pandemic and to soften the hit on the budget.

### Economic Impact and Immediate Needs
- The near-term economic fallout of the COVID-19 pandemic is expected to be severe.
- Key channels of impact:
  - Travel restrictions and the subsequent loss of tourism receipts are sharply reducing economic activity.
  - Fiscal and external positions are weakening, creating large additional financing needs.

### Seychelles Authorities’ Response
- Immediate containment and support measures taken by the authorities include:
  - Border closures.
  - Strengthening health policy responses.
  - Supporting households and firms.
- The central bank provided emergency assistance and maintained a flexible exchange rate.
- The resilience of the banking system is highlighted as crucial to restoring external and internal balances.
- The central bank should remain vigilant to potential market stress and emerging risks to financial markets.

### IMF Assessment and Conditions
- The RFI will provide timely resources to address urgent balance of payments and budgetary needs.
- The IMF will continue to monitor Seychelles’ situation closely and remain in close dialogue with the authorities.
- The assistance of other international financial institutions and development partners is described as crucial to:
  - Close the remaining financing gaps.
  - Ease the adjustment burden.
  - Preserve economic growth.

### Governance and Transparency Commitments
- The authorities committed to transparency and good governance in the use of emergency financing by:
  - Providing monthly reports of pandemic-related expenditure to the National Assembly.
  - Undertaking an independent audit of such spending and procurement and publishing the results.

### Statement by IMF Deputy Managing Director and Chair (Mr. Tao Zhang)
- Excerpted points:
  - “Seychelles’ hard-won economic gains since the 2008 crisis, supported by successive Fund arrangements, are being eroded by the severe impact of the COVID-19 pandemic.”
  - “A temporary fiscal expansion as well as expeditious external support are needed to address the large output contraction.”
  - “Once the pandemic dissipates and confidence is restored, the authorities are committed to return to a fiscal stance that stabilizes debt.”
  - “The emergency IMF support under the Rapid Financing Instrument provides timely resources to the authorities to address the urgent balance of payments and budgetary needs.”

*Press Release No. 20/212 — May 8, 2020; IMF Communications Department.*

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## References

- [https://www.imf.org/-/media/images/imf/bios/imfboard.jpg](https://www.imf.org/-/media/images/imf/bios/imfboard.jpg)
- [The Executive Board](https://www.imf.org/external/np/sec/memdir/eds.aspx)
- [Seychelles and the IMF](http://www.imf.org/external/country/SYC/index.htm)
- [The IMF's Rapid Financing Instrument (RFI)](https://www.imf.org/en/about/factsheets/sheets/2023/rapid-financing-instrument-rfi)
- [Press Releases](https://www.imf.org/en/news/searchnews)
- [PRESS CENTER](http://presscenter.imf.org/)
- [https://www.imf.org/en/Topics/imf-and-covid19/COVID-Lending-Tracker](https://www.imf.org/en/Topics/imf-and-covid19/COVID-Lending-Tracker)
- [https://www.imf.org/external/NP/SEC/bc/eng/index.aspx](https://www.imf.org/external/NP/SEC/bc/eng/index.aspx)
- [https://www.imf.org/en/home](https://www.imf.org/en/home)

_Source: https://www.imf.org/en/news/articles/2020/05/08/pr20212-seychelles-imfexecboard-approves-us-31-2m-purchase-emergency-asst-address-covid19_