Reforms give foreign reserves healthy margin
21.09.2009
We now have enough foreign reserves for eight weeks’ imports compared to what we had before our economic reforms that would have catered for just a few days’ needs.
Central Bank governor Pierre Laporte said this on Friday during this month’s press conference on the reforms.
Mr Laporte said our gross international reserves now stand at US $150 million with net usable reserves being US $113 million.
He said countries on average are expected to have enough reserves for 12 weeks’ imports and ours are building up to that level.
“Before the reforms we had three days’ reserves but now we have a two-month cover. To be comfortable we need three months’ cover and we are getting there,” he said.
He also said all conditions now exist for banks to lower their interest rates on loans and some are already dropping theirs. He hoped they will drop further and others will follow suit allowing more people to borrow money so the banks can make their profits by giving our more loans rather than from high interest rates.
Mr Laporte also said that as regularly published the rupee continues to appreciate against major foreign currencies. Only Friday the US dollar was selling for less than R12 whereas in November it cost R17.
The press conference focused on four main issues, namely: the fact that the reform programme launched in November is right on track, debt negotiations, the release this week of a memorandum of action on public administration and public sector reforms to the National Assembly and conclusion of external audits on seven major parastatals.
Minister Faure said the government officials on Friday met the Finance and Public accounts committee and talked about the external audit protocol we reported about in our last issues of Seychelles Weekend Nation.
We hope to bring you further details from the press conference later this week.