The board of the Central Bank of Seychelles has set the limit on short-term advances that the institution can provide to the government during the year 2022 at R250 million.
Whilst the Central Bank of Seychelles (CBS) acknowledges the uncertainties associated with the emergence of new Covid-19 variants, the stronger economic recovery being forecasted in 2022 is expected to positively impact government revenue. Based on this outlook, the new limit for government advances in 2022 represents half the amount that was set for the past two years.
The interest rate applicable on such advances will be equal to the prevailing average tender rate for the 91-day Treasury bill, plus a margin of 0.5 per cent, on the date the funds are credited.
The decision was taken by the CBS board at its meeting held on December 20, 2021 in line with Section 40A (1) of the CBS Act 2004, as amended.
The exercise, which makes provision for the terms of advances that CBS extends to government in Seychelles rupees, in the event of a temporary shortfall in revenue, is done annually and published in the Official Gazette as per Section 40(2) of the CBS Act.
However, the requirement for publication in the Official Gazette is not applicable for instances where CBS grants temporary advances to the government in the event of force majeure, such as the Covid-19 pandemic, as per Section 40A (1), of the amended Act. CBS’ decision to publicise the limit is in line with its commitment to transparency.
