Abstract
SEYCHELLES
Title page
SEYCHELLES
2022 ARTICLE IV CONSULTATION AND SECOND REVIEW UNDER THE EXTENDED FUND FACILITY ARRANGEMENT, AND REQUEST FOR MODIFICATION OF PERFORMANCE CRITERIA AND INDICATIVE TARGETS—INFORMATIONAL ANNEX
June 14, 2022
Prepared By
The African Department
(In consultation with other departments)
Contents
RELATIONS WITH THE FUND
RELATIONS WITH OTHER INTERNATIONAL FINANCIAL ORGANIZATIONS
STATISTICAL ISSUES
Relations with the Fund
(As of May 31, 2022)
Membership Status: Joined 6/30/1977. Accepted Article VIII obligations since 01/03/1978.
| General Resources Account | SDR Million | % Quota |
| Quota | 22.90 | 100.00 |
| Fund holdings of currency | 100.13 | 437.24 |
| Reserve Position in Fund | 3.53 | 15.41 |
| General Resources Account | SDR Million | % Quota |
| Quota | 22.90 | 100.00 |
| Fund holdings of currency | 100.13 | 437.24 |
| Reserve Position in Fund | 3.53 | 15.41 |
| SDR Department | SDR Million | % Allocations |
| Net cumulative allocation | 30.23 | 100.00 |
| Holdings | 23.59 | 78.03 |
| SDR Department | SDR Million | % Allocations |
| Net cumulative allocation | 30.23 | 100.00 |
| Holdings | 23.59 | 78.03 |
| Outstanding Purchases and Loans: | ||
| Emergency Assistance | 22.90 | 100.00 |
| Extended Arrangements | 57.86 | 252.65 |
| Outstanding Purchases and Loans: | ||
| Emergency Assistance | 22.90 | 100.00 |
| Extended Arrangements | 57.86 | 252.65 |
Latest Financial Arrangements:
| SDR Million | ||||
| Type | Arrangement | Expiration | Amount Approved | Amount Drawn |
| EFF | Jul 29, 2021 | Mar 28, 2024 | 74.00 | 48.00 |
| EFF | Jun 04, 2014 | Jun 03, 2017 | 11.45 | 11.45 |
| EFF | Dec 23, 2009 | Dec 22, 2013 | 26.40 | 26.40 |
| SDR Million | ||||
| Type | Arrangement | Expiration | Amount Approved | Amount Drawn |
| EFF | Jul 29, 2021 | Mar 28, 2024 | 74.00 | 48.00 |
| EFF | Jun 04, 2014 | Jun 03, 2017 | 11.45 | 11.45 |
| EFF | Dec 23, 2009 | Dec 22, 2013 | 26.40 | 26.40 |
Latest Outright Loans:
| SDR Million | ||||
| Type | Commitment | Drawn/Expired | Amount Approved | Amount Drawn |
| RFI | May 08, 2020 | May 12, 2020 | 22.90 | 22.90 |
| SDR Million | ||||
| Type | Commitment | Drawn/Expired | Amount Approved | Amount Drawn |
| RFI | May 08, 2020 | May 12, 2020 | 22.90 | 22.90 |
Projected Obligations to the Fund (SDR Million: based on existing use of resources and present holdings of SDRs):
| Forthcoming | |||||
| 2022 | 2023 | 2024 | 2025 | 2026 | |
| Principal | 2.90 | 8.46 | 13.22 | 6.95 | 8.82 |
| Charge/interest | 1.04 | 1.96 | 1.55 | 1.09 | 0.89 |
| Total | 3.94 | 10.42 | 14.77 | 8.04 | 9.71 |
| Forthcoming | |||||
| 2022 | 2023 | 2024 | 2025 | 2026 | |
| Principal | 2.90 | 8.46 | 13.22 | 6.95 | 8.82 |
| Charge/interest | 1.04 | 1.96 | 1.55 | 1.09 | 0.89 |
| Total | 3.94 | 10.42 | 14.77 | 8.04 | 9.71 |
Implementation of HIPC Initiative: Not applicable
Implementation of Multilateral Debt Relief Initiative (MDRI): Not applicable
Implementation of Catastrophe Containment and Relief (CCR): Not applicable
An updated safeguards assessment of the Central Bank of Seychelles (CBS) was finalized in June 2021. The assessment found that the CBS continues to develop its safeguards framework and has implemented all but one recommendation from the 2018 assessment. External audit arrangements remain robust and financial reporting practices adhere to international standards.
While steps have been taken to improve the internal audit function, further efforts and enhanced oversight are needed to strengthen capacity and coverage. Moreover, the CBS will need to reinforce the risk management function to ensure adequate capacity. The CBS’ legal framework should be amended to strengthen oversight and autonomy, as also recommended by the previous safeguards assessment. The assessment also recommended that the advances to the government and involvement in COVID-19-related lending to banks and other financial institutions should be revisited to safeguard the CBS’ financial autonomy, and the CBS is progressing with the implementation by reducing the limit on advances, charging market interest rate on cr edit to the government, unwinding the COVID-19-related lending schemes, and revisiting collateral policy.
Exchange Rate Arrangement: The exchange market was liberalized in November 2008, which resulted in the elimination of all restrictions on the making of payments and transfers for current international transactions that are subject to Fund approval under Article VIII Sections 2, 3, and 4. The de jure exchange rate regime is floating, and the de facto exchange rate regime is also classified as floating. On March 28, 2022, US$1 = SR 14.33 (mid-rate).
Article IV Consultations: Seychelles is currently under a 24-month consultation cycle. The last Article IV Consultation was concluded on June 14, 2019.
Technical Assistance (November 2016–May 2022):
MCM
Self-assessment of ISOCO principle, November-December 2016
Strengthen non-bank financial supervision, February-March 2017
Diagnostic Mission, March 2017
Tools and procedures for communication and inflation, March 2017
Developing Inflation Forecasting and Monetary Policy Analysis, June 2017
Implementation of Basel II, July 2017
Monetary Policy Implementation, October 2017 F
PAS, October 2017
Central Bank Communication, January 2018
Review Twin Peaks Model and provide training, February 2018
MPIO-Scoping the development of a secondary market for government securities, November 2018
Implementation of IFRS9, December 2018
Guidance on Oversight of Payment Systems, June 2021
Basel II/III - Regulatory Reform, September 2021
Monetary Policy Implementation & Operations, December 2021
Medium-term Debt Management Strategy and Annual Borrowing Plan (MTDS and ABP), January 2022
FAD
Ensure adequate controls to prevent fraud and revenue leakage while facilitating trade, February 2017
Carbon Taxation, March 2017
Follow-up on 2016 diagnostic mission recommendations, April 2017
Assist with developing and implementing SRC collection strategy, September 2017
Follow-up on cash-flow forecast and PFM RBM framework, October 2017
Develop a compliance management framework, November 2017
Strengthening Risk Management and oversight of SOEs, December 2017
Development of operational accounting manual, January 2018
Medium-term macro-fiscal framework and budget documentation, February 2018
SOE Fiscal Risks, March 2018
Cash Management, April 2018
Development of operational accounting manual, May 2018
SRC Compliance Improvement Plan, July 2018
Fiscal Risks Statement, September 2018 Development of operational accounting manual, October 2018
Public Financial Management, Asset and Liability management, September 2021
STA
National Accounts, October 2017
Price Statistics, October 2017
Prices and Index Numbers, February 2018
National Accounts, February 2018
National Accounts, April 2018
Consumer Prices, July 2018
National Accounts, July 2018
National Accounts, July 2019
National Accounts, November 2019
Consumer Prices, November 2019
National Accounts, April 2020
National Accounts, July 2020
National Accounts, October 2020
Consumer Prices, November 2020
Consumer Prices, January 2021
National Accounts, February 2021
National Accounts, July 2021
External Sector Statistics, October 2021
Producer Prices, November 2021
National Accounts, January 2022
LEG
AML/CFT supervision, December 2017
AML/CFT Legal Drafting Mission, April 2018
Resident Representative: Aissatou Diallo
Relations with Other International Financial Organizations
As of May 2022, Seychelles collaborates with the World Bank Group and the African Development Bank. Further information may be obtained from the following sources.
Statistical Issues
| SEYCHELLES—STATISTICAL ISSUES APPENDIX As of June 7, 2022 |
|
| I. Assessment of Data Adequacy for Surveillance | |
| General: Data provision has some shortcomings, but it is broadly adequate for surveillance. Good progress has been achieved in improving statistical capacity, though sustained technical assistance and additional resources will be required for statistical development over the medium term in order to improve the quality of economic statistics. | |
| National accounts: National accounts data are prepared on a calendar-year basis by the National Bureau of Statistics (NBS). The NBS released rebased estimates of the national accounts in 2021, updating the base year from 2006 to 2014. NBS also compiles quarterly national accounts data from 2006 to the present. Further technical assistance is being provided to backcast the annual and quarterly national accounts for the period of 2006 to 2013, compile quarterly national accounts using the expenditure approach, and produce seasonally-adjusted quarterly GDP figures. Tourism statistics are compiled on a weekly and monthly basis while production indicators are compiled quarterly; both are disseminated in a timely manner. Data on average earnings and employment by sector are collected on a quarterly basis by the N BS, but there are no data on unit labor costs. | |
| Price statistics: An updated consumer price index (CPI) was introduced in February 2021 based on expenditure weights derived from the 2018/19 household budget survey. Further technical assistance is being provided to improve and update the producer price index. | |
| Government finance statistics: Seychelles disseminates data primarily based on the Government Finance Statistics Manual (GFSM 2014). The last technical assistance mission recommended the authorities to: (i) establish a GFS task force among Treasury, Financial Planning and Control Division (FPC), Debt Management staff, and other relevant agencies to discuss and resolve technical and methodological issues; and (ii) establish a strategic plan that specifies how to address weaknesses in terms of augmenting the cash recording of transactions in the execution of the budget with relevant accrual-based measures and improving data on other economic flows for financial assets and liabilities. While substantial progress has been made, further work will be needed to support a full move to GFSM 2014, including for the broader public sector. | |
| Monetary and financial statistics: Monetary statistics compiled by the Central Bank of Seychelles (CBS) are consistent with the methodology of the 2016 Monetary and Financial Statistics Manual and Compilation Guide (MFSMCG). Seychelles reports regular and good quality monetary statistics for the central bank, other depository corporations and for the other financial corporations The coverage of other financial corporations could be improved. The CBS reports data on some key series and indicators of the Financial Access Survey (FAS), including the two indicators (commercial bank branches per 100,000 adults and ATMs per 100,000 adults) adopted by the UN to monitor Target 8.10 of the Sustainable Development Goals (SDGs). | |
| Financial sector surveillance: Seychelles reports financial soundness indicators (FSIs) to the Fund, which are published on the IMF’s FSI website. The authorities report thirteen core and six encouraged FSIs for deposit takers to the Fund, on a monthly basis. Work is ongoing to strengthen the recently established macroprudential framework, which includes revisions to the Central Bank Act and migration towards Basel II. | |
| External sector statistics: The authorities have adopted the methodology of the sixth edition of the Balance of Payments and International Investment Position Manual, and began compiling the international investment position in 2015. Quarterly balance of payments and international investment position (IIP) data are being compiled and made publicly available since 2015. Considerable progress has been made in external sector statistics, including the compilation of cross-border transaction and stock data for special purpose entities and the adoption of a new estimation model for travel services. | |
| II. Data Standards and Quality | |
| A subscriber to the IMF’s Special Data Dissemination Standard (SDDS), Seychelles met SDDS specifications on May 1, 2015. Seychelles is currently using a timeliness flexibility option for the producer price index. Seychelles’ latest SDDS Annual Observance Report is available on the Dissemination Standards Bulletin Board. | No data ROSC is available. |
| SEYCHELLES—STATISTICAL ISSUES APPENDIX As of June 7, 2022 |
|
| I. Assessment of Data Adequacy for Surveillance | |
| General: Data provision has some shortcomings, but it is broadly adequate for surveillance. Good progress has been achieved in improving statistical capacity, though sustained technical assistance and additional resources will be required for statistical development over the medium term in order to improve the quality of economic statistics. | |
| National accounts: National accounts data are prepared on a calendar-year basis by the National Bureau of Statistics (NBS). The NBS released rebased estimates of the national accounts in 2021, updating the base year from 2006 to 2014. NBS also compiles quarterly national accounts data from 2006 to the present. Further technical assistance is being provided to backcast the annual and quarterly national accounts for the period of 2006 to 2013, compile quarterly national accounts using the expenditure approach, and produce seasonally-adjusted quarterly GDP figures. Tourism statistics are compiled on a weekly and monthly basis while production indicators are compiled quarterly; both are disseminated in a timely manner. Data on average earnings and employment by sector are collected on a quarterly basis by the N BS, but there are no data on unit labor costs. | |
| Price statistics: An updated consumer price index (CPI) was introduced in February 2021 based on expenditure weights derived from the 2018/19 household budget survey. Further technical assistance is being provided to improve and update the producer price index. | |
| Government finance statistics: Seychelles disseminates data primarily based on the Government Finance Statistics Manual (GFSM 2014). The last technical assistance mission recommended the authorities to: (i) establish a GFS task force among Treasury, Financial Planning and Control Division (FPC), Debt Management staff, and other relevant agencies to discuss and resolve technical and methodological issues; and (ii) establish a strategic plan that specifies how to address weaknesses in terms of augmenting the cash recording of transactions in the execution of the budget with relevant accrual-based measures and improving data on other economic flows for financial assets and liabilities. While substantial progress has been made, further work will be needed to support a full move to GFSM 2014, including for the broader public sector. | |
| Monetary and financial statistics: Monetary statistics compiled by the Central Bank of Seychelles (CBS) are consistent with the methodology of the 2016 Monetary and Financial Statistics Manual and Compilation Guide (MFSMCG). Seychelles reports regular and good quality monetary statistics for the central bank, other depository corporations and for the other financial corporations The coverage of other financial corporations could be improved. The CBS reports data on some key series and indicators of the Financial Access Survey (FAS), including the two indicators (commercial bank branches per 100,000 adults and ATMs per 100,000 adults) adopted by the UN to monitor Target 8.10 of the Sustainable Development Goals (SDGs). | |
| Financial sector surveillance: Seychelles reports financial soundness indicators (FSIs) to the Fund, which are published on the IMF’s FSI website. The authorities report thirteen core and six encouraged FSIs for deposit takers to the Fund, on a monthly basis. Work is ongoing to strengthen the recently established macroprudential framework, which includes revisions to the Central Bank Act and migration towards Basel II. | |
| External sector statistics: The authorities have adopted the methodology of the sixth edition of the Balance of Payments and International Investment Position Manual, and began compiling the international investment position in 2015. Quarterly balance of payments and international investment position (IIP) data are being compiled and made publicly available since 2015. Considerable progress has been made in external sector statistics, including the compilation of cross-border transaction and stock data for special purpose entities and the adoption of a new estimation model for travel services. | |
| II. Data Standards and Quality | |
| A subscriber to the IMF’s Special Data Dissemination Standard (SDDS), Seychelles met SDDS specifications on May 1, 2015. Seychelles is currently using a timeliness flexibility option for the producer price index. Seychelles’ latest SDDS Annual Observance Report is available on the Dissemination Standards Bulletin Board. | No data ROSC is available. |
Seychelles: Table of Common Indicators Required for Surveillance
Any reserve assets that are pledged or otherwise encumbered should be specified separately. Also, data should comprise short-term liabilities linked to a foreign currency but settled by other means as well as the notional values of financial derivatives to pay and to receive foreign currency, including those linked to a foreign currency but settled by other means.
Both market-based and officially-determined, including discount rates, money market rates, rates on treasury bills, notes and bonds.
Foreign, domestic bank, and domestic nonbank financing.
The general government consists of the central government (budgetary funds, extra budgetary funds, and social security funds) and state and local governments.
Including currency and maturity composition.
Includes external gross financial asset and liability positions vis-à-vis nonresidents.
Daily (D); weekly (W); monthly (M); quarterly (Q); annually (A); irregular (I); and not available (NA).
Seychelles: Table of Common Indicators Required for Surveillance
| Date of latest observation (For all dates in table, please use format dd/mm/yy) |
Date received | Frequency of Data7 | Frequency of Reporting7 | Frequency of Publication7 | |
|---|---|---|---|---|---|
| Exchange Rates | 01/06/22 | 01/06/22 | D | D | D |
| International Reserve Assets and Reserve Liabilities of the Monetary Authorities1 | 21/04/22 | 01/05/2022 | D | W | M |
| Reserve/Base Money | 31/12/21 | 01/05/2022 | D | W | M |
| Broad Money | 31/12/21 | 01/05/2022 | M | M | M |
| Central Bank Balance Sheet | 31/12/21 | 01/05/2022 | D | W | M |
| Consolidated Balance Sheet of the Banking System | 31/12/21 | 01/05/2021 | M | M | M |
| Interest Rates2 | 31/03/22 | 01/05/2022 | M | M | M |
| Consumer Price Index | 31/03/22 | 01/05/2022 | M | M | M |
| Revenue, Expenditure, Balance and Composition of Financing3 – General Government4 | 31/12/21 | 05/20/2022 | M | M | M |
| Revenue, Expenditure, Balance and Composition of Financing3– Central Government | 31/12/21 | 05/20/2022 | M | M | M |
| Stocks of Central Government and Central Government-Guaranteed Debt5 | 31/12/21 | 01/05/2022 | M | M | M |
| External Current Account Balance | 31/12/21 | 01/05/2022 | Q | Q | Q |
| Exports and Imports of Goods and Services | 31/12/21 | 01/05/2022 | Q | Q | Q |
| GDP/GNP | 31/12/21 | 01/05/2022 | Q | Q | Q |
| Gross External Debt | 31/12/21 | 01/05/2022 | Q | Q | Q |
| International Investment Position6 | 31/12/21 | 01/05/2022 | Q | Q | Q |
Any reserve assets that are pledged or otherwise encumbered should be specified separately. Also, data should comprise short-term liabilities linked to a foreign currency but settled by other means as well as the notional values of financial derivatives to pay and to receive foreign currency, including those linked to a foreign currency but settled by other means.
Both market-based and officially-determined, including discount rates, money market rates, rates on treasury bills, notes and bonds.
Foreign, domestic bank, and domestic nonbank financing.
The general government consists of the central government (budgetary funds, extra budgetary funds, and social security funds) and state and local governments.
Including currency and maturity composition.
Includes external gross financial asset and liability positions vis-à-vis nonresidents.
Daily (D); weekly (W); monthly (M); quarterly (Q); annually (A); irregular (I); and not available (NA).
Seychelles: Table of Common Indicators Required for Surveillance
| Date of latest observation (For all dates in table, please use format dd/mm/yy) |
Date received | Frequency of Data7 | Frequency of Reporting7 | Frequency of Publication7 | |
|---|---|---|---|---|---|
| Exchange Rates | 01/06/22 | 01/06/22 | D | D | D |
| International Reserve Assets and Reserve Liabilities of the Monetary Authorities1 | 21/04/22 | 01/05/2022 | D | W | M |
| Reserve/Base Money | 31/12/21 | 01/05/2022 | D | W | M |
| Broad Money | 31/12/21 | 01/05/2022 | M | M | M |
| Central Bank Balance Sheet | 31/12/21 | 01/05/2022 | D | W | M |
| Consolidated Balance Sheet of the Banking System | 31/12/21 | 01/05/2021 | M | M | M |
| Interest Rates2 | 31/03/22 | 01/05/2022 | M | M | M |
| Consumer Price Index | 31/03/22 | 01/05/2022 | M | M | M |
| Revenue, Expenditure, Balance and Composition of Financing3 – General Government4 | 31/12/21 | 05/20/2022 | M | M | M |
| Revenue, Expenditure, Balance and Composition of Financing3– Central Government | 31/12/21 | 05/20/2022 | M | M | M |
| Stocks of Central Government and Central Government-Guaranteed Debt5 | 31/12/21 | 01/05/2022 | M | M | M |
| External Current Account Balance | 31/12/21 | 01/05/2022 | Q | Q | Q |
| Exports and Imports of Goods and Services | 31/12/21 | 01/05/2022 | Q | Q | Q |
| GDP/GNP | 31/12/21 | 01/05/2022 | Q | Q | Q |
| Gross External Debt | 31/12/21 | 01/05/2022 | Q | Q | Q |
| International Investment Position6 | 31/12/21 | 01/05/2022 | Q | Q | Q |
Any reserve assets that are pledged or otherwise encumbered should be specified separately. Also, data should comprise short-term liabilities linked to a foreign currency but settled by other means as well as the notional values of financial derivatives to pay and to receive foreign currency, including those linked to a foreign currency but settled by other means.
Both market-based and officially-determined, including discount rates, money market rates, rates on treasury bills, notes and bonds.
Foreign, domestic bank, and domestic nonbank financing.
The general government consists of the central government (budgetary funds, extra budgetary funds, and social security funds) and state and local governments.
Including currency and maturity composition.
Includes external gross financial asset and liability positions vis-à-vis nonresidents.
Daily (D); weekly (W); monthly (M); quarterly (Q); annually (A); irregular (I); and not available (NA).