Regulatory Alerts2021-04-12
Central Bank of Seychelles FX Market Adjustment Directive
The Central Bank of Seychelles has directed all Bureaux de Change to adjust their foreign exchange prices to align with current market conditions. This directive addresses a recent domestic market failure characterized by an oversupply of foreign currency and stagnant exchange rates, which has prevented customers from converting foreign currencies into Seychelles Rupees. The central bank will continuously monitor pricing adjustments and issue further guidance as necessary to maintain orderly market functioning.
CENTRAL BANK OF SEYCHELLES P. O. Box 701, Victoria, Seychelles Telephone: [+248] 428 20 00 Ref: FSD/BC/GEN 1 Fax: [+248] 432 36 65 E-mail: enquiries@cbs.sc Date: April 12, 2021 To All Bureaux de Change Adjusting of Prices to Reflect Current Market Conditions In light of recent developments in foreign exchange market conditions locally, the Central Bank of Seychelles (CBS) is hereby urging all Bureaux de Change (BDCs) to adjust their prices to reflect current market conditions. As per the norm under a floating exchange rate regime, it is expected that with an important increase in the supply of foreign exchange compared to demand, there is a corresponding appreciation in the exchange rate to reflect same. However, in recent weeks, CBS has observed clear evidence of market failure where customers including visitors are not able to sell their foreign currencies for Seychelles Rupees. In order to ensure the orderly functioning of the domestic foreign exchange market CBS is thereby urging all market participants, including BDCs, to adjust their pricing appropriately. CBS shall continue to monitor the situation closely and pronounce further on the matter should there be a need based on market developments. CBS trusts in your adherence to the above. Yours sincerely, C. Abel (Ms) Governor