Commercial banks in Seychelles implement monetary policies mandated by the Central Bank

Nouvobanq is currently working on its revised tariffs and will publish them shortly. (Nation of Seychelles)

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(Seychelles News Agency) – All Seychelles commercial banks have implemented the monetary policies announced by the Central Bank of Seychelles (CBS) in June after receiving an ultimatum to do so by October 1, an official said.

The president of the Seychellois Bankers AssociationPhillip Mustache told SNA that while not all banks have released their changes yet, they have already informed CBS and implemented them before the deadline.

The latest bank to announce its new revised interest rates is the Bank of Ceylon, which has released its new interest rate on savings accounts which is 1.50% per annum and will go into effect on October 18. The prime rate is 7.25% and came into effect on October 11.

ABSA Bank Seychelles announced a cut in its key rate which has been reduced by 0.5% since October 6 while Nouvobanq is currently working on its revised rates and will release them soon.

“In fact, all the banks in the country started working on these changes when the ultimatum was given, because of course they would have suffered the consequences if they had not done so,” Mustache said.

Central Bank Governor Caroline Abel issued an ultimatum to the island nation’s banks during a press conference on September 28.

“The monetary policy framework we put in place in June reflects the economy we know today. Whenever the board makes a decision, it takes effect three months later, which means banks have enough days to act, ”Abel told reporters.

The monetary policy framework was implemented in June when the CBS lowered its key rates for the third quarter of 2021 to 2%.

This was deemed necessary to reduce the cost of credit and thus stimulate economic activity. In this regard, the permanent credit facility was lowered from 6% to 3.5% and the permanent deposit facility from 1% to 0.5%.

“As most of the banks’ head offices are not based in Seychelles, some of them had to wait for the changes to be approved by their head office before implementation and that is why each bank announced the measure to several times and CBS took it into consideration, ”Mustache added.

The central bank had threatened to take unconventional measures against banks that did not revise their monetary policies.

There are currently eight commercial banks operating in Seychelles, an archipelago in the western Indian Ocean. These are Absa Bank Seychelles, MCB Seychelles Limited, Bank of Baroda, Nouvobanq, Seychelles Commercial Bank, Al Salam Bank Seychelles Limited and Bank of Ceylon. The eighth, Bank Al Habib, is expected to cease operations by November 31.

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