On behalf of our Seychellois authorities, we thank staff, management and the Executive Board for their continued support of Seychelles, especially during these challenging times. The authorities have requested a purchase of SDR22.9 million, equivalent to 100 percent of quota, under the Rapid Financing Instrument. This would fill about a quarter of the balance of payments financing need and should help catalyze additional support.
Before the COVID-19 pandemic, Seychelles was continuing to make considerable progress in strengthening economic stability and sustainability. The Seychellois authorities have demonstrated their strong commitment to economic reform under successive Fund programs and the current Policy Coordination Instrument (PCI). They have implemented sound monetary and fiscal policies, reduced public debt and progressed structural reforms, all of which have significantly improved the resilience of the economy since the 2008 economic crises.
While staff have not yet completed the latest review under the PCI, their preliminary view is that all end-December 2019 quantitative targets were met while the 12-month average inflation at end-2019 was well within the inner bound of the monetary policy consultation clause. Structural policies have been progressed broadly in line with the PCI targets.
The outbreak of COVID-19 caused a health emergency. Progressively from February 2020, the authorities restricted international arrivals and, in order to prevent further spread of the virus, the authorities closed Seychelles’ borders and suspended all international flights effective from mid-March. From early April, outdoor movements were prohibited and non-priority businesses closed. The authorities allocated additional financing equal to 0.5 percent of GDP to health-related spending. Thanks to strict and timely measures, Seychelles has had only 11 cases of COVID-19 and no fatalities. Recently, there have been no new cases reported and the authorities are now planning to ease restrictions in phases.