Chapter

SEYCHELLES

Author(s):
International Monetary Fund. Monetary and Capital Markets Department
Published Date:
September 2004
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(Position as of December 31, 2003)
Status Under IMF Articles of Agreement
Article VIIIDate of acceptance: January 3, 1978.
Exchange Arrangement
CurrencyThe currency of Seychelles is the Seychelles rupee.
Other legal tenderVarious commemorative gold coins issued on several occasions since 1976 are also legal tender.
Exchange rate structureUnitary.
Classification
Conventional pegged arrangementThe Seychelles rupee is pegged to a weighted basket of currencies of Seychelles’ main trading and tourism partners, with the weights as follows: the euro (37.7%), the Japanese yen (2.7%), the pound sterling (15.7%), the Singapore dollar (7.7%), the South African rand (10.5%), and the U.S. dollar (25.7%). Effective July 1, 2003, the CBS imposes an appreciation limit of SR 5.50 per US$1. Exchange rates for various currencies are quoted on the basis of their New York closing rates for the U.S. dollar on the previous day, using the U.S. dollar rate for the Seychelles rupee as derived from the fixed parity to the currency basket. The Central Bank of Seychelles (CBS) circulates these rates daily to the commercial banks. The CBS charges a commission of 0.125% on purchases and 0.875% on sales of euros, pounds sterling, and U.S. dollars.
The commercial banks are authorized to deal in pounds sterling and other currencies at rates based on the exchange rates circulated daily by the CBS for the respective currencies. Other authorized dealers include casinos, guest houses, hotels, restaurants, self-catering establishments, tour operators, travel agents, car rental services, boat charters, shipping agents, and ship chandlers. These dealers are restricted to buying only in the course of their licensed activity. They must sell an allocated percentage of their foreign currency proceeds to commercial banks.
Exchange taxNo.
Exchange subsidyNo.
Forward exchange marketNo.
Arrangements for Payments and Receipts
Prescription of currency requirementsYes.
Controls on the use of domestic currencyNonresidents are required to pay for selected services in foreign currency.
Use of foreign exchange among residentsYes.
Payments arrangements
Bilateral payments arrangements
OperativeYes.
Regional arrangementsSeychelles is a participant in the COMESA and RIFF.
Administration of controlThe exchange control authorities are the CBS and the Ministry of Economic Planning (MEP). The MEP partially controls foreign trade through a mechanism of import/export and price controls.
International security restrictionsNo.
Payments arrears
OfficialYes.
PrivateYes.
Controls on trade in gold (coins and/or bullion)
Controls on domestic ownership and/or tradeResidents may purchase, hold, and sell gold freely in any form, except for dealings in gold bullion, which are restricted to authorized dealers.
Controls on exports and imports of banknotes
On exports
Domestic currencyThe maximum amount of domestic currency that travelers may take out of the country is SR 2,000.
Foreign currencyTravelers may take out any amount of foreign currency.
On imports
Domestic currencyThe maximum amount of domestic currency that travelers may bring into the country is SR 2,000.
Foreign currencyTravelers may bring in any amount of foreign currency.
Resident Accounts
Foreign exchange accounts permittedYes.
Held domesticallyThese accounts are permitted, but approval is required.
Held abroadYes.
Accounts in domestic currency held abroadn.a.
Accounts in domestic currency convertible into foreign currencyn.a.
Nonresident Accounts
Foreign exchange accounts permittedYes.
Domestic currency accountsYes.
Convertible into foreign currencyNo.
Blocked accountsn.a.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for importsNo.
Documentation requirements for release of foreign exchange for importsAn import permit is required.
Import licenses and other nontariff measuresImporters other than individuals are required to obtain import licenses from the Seychelles Licensing Authority, in accordance with objective criteria. In addition, for each shipment of goods, an importer must apply to the Import Control Division of the MEP for a permit, the granting of which is discretionary. Permits are normally not granted for used vehicles and some nonessential goods.
Import taxes and/or tariffsImports are subject to taxes of up to 200%, with most goods subject to rates ranging between 5% and 30%.
State import monopolyThe Seychelles Marketing Board has a monopoly on imports of rice, sugar, meat, vegetables, margarine, tomato sauce, animal feed, oil, coffee and tea, fruits, flour, and chili sauce.
Exports and Export Proceeds
Repatriation requirementsYes.
Surrender requirementsAll export proceeds must be transacted through domestic commercial banks, which are the only authorized sellers of foreign exchange. Surrender requirements are 45% of net proceeds, and are mostly earmarked to finance essential imports and debt-service payments. The remainder is used by commercial banks in accordance with the priority listing.
Financing requirementsNo.
Documentation requirementsNo.
Export licensesNo.
Export taxesNo.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersNo.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsYes.
Surrender requirementsResidents must surrender the proceeds to a commercial bank within 90 days of the transaction.
Restrictions on use of fundsReceipts may be disposed freely, except for dividend remittances and transfers.
Capital Transactions
Controls on capital transactionsYes.
Controls on capital and money market instruments
On capital market securities
Shares or other securities of a participating nature
Purchase locally by nonresidentsYes.
Sale or issue locally by nonresidentsYes.
Controls on derivatives and other instrumentsNo.
Controls on credit operationsNo.
Controls on direct investmentNo.
Inward direct investmentForeign investment is permitted freely, provided that such investment does not involve ownership of land.
Controls on liquidation of direct investmentNo.
Controls on real estate transactions
Purchase locally by nonresidentsYes.
Sale locally by nonresidentsYes.
Controls on personal capital transactionsNo.
Provisions specific to commercial banks and other credit institutions
Differential treatment of deposit accounts in foreign exchange
Liquid asset requirementsThe liquidity reserve ratio for commercial banks is 50% of their deposit liabilities. The cash reserve ratio is 2.5%.
Investment regulations
Abroad by banksYes.
In banks by nonresidentsYes.
Provisions specific to institutional investorsNo.
Other controls imposed by securities lawsNo.
Changes During 2003
Exchange arrangementJuly 1. An exchange rate appreciation limit of SR 5.50 per US$1 was introduced.

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