A credit rating of BB – for the second straight year for the Seychelles’ government, signals the island nation’s economic stability and increased resilience amid global economic uncertainty, the finance minister says. Fitch Ratings, one of the big three credit rating agencies globally gave Seychelles the same grade in 2015. The Seychelles Finance, Trade and Blue Economy Minister, Jean Paul Adam, said that the rating and the archipelago’s ‘stable outlook’ affirmed by Fitch is also a show of “confidence in our economy.”
In 2008, Seychelles, a 115-island archipelago in the western Indian Ocean with 93,000 people, had a total public debt that stood at 151% of GDP, with the external public debt representing almost 95% of GDP (US$808 million). A default in debt payments prompted Seychelles to embark on a five-year IMF-backed economic reform programme in October 2008, ending in October 2013. This has been followed by a new generation of reforms approved by the IMF in June 2014.
The Governor of the Central Bank of Seychelles Caroline Abel says that there is a need to continue to monitor the monetary policies that could affect future ratings. This includes maintaining an acceptable foreign exchange reserve; ensure a stable inflation rate and flexible exchange rate regime among others. In the case of the country’s foreign exchange reserve, Abel confirmed that this currently stands as $35 million – equivalent to 4.7 months’ worth of importation.
Both Adam and Abel have reflected on the need for a coordinated approach between the finance ministry and central bank to ensure that reforms are implemented in a way that helps to maintain local and international confidence in the economy.