World Bank gives Seychelles $ 6.9 million line of credit, boosting reserves

The Central Bank has already received requests from the Seychelles Trading Company for basic food (STC) commodities and Seychelles Petroleum Company (SEYPEC) for fuel. (Seychelles News Agency)

(Seychelles News Agency) - The World Bank has given Seychelles a $6.9 million line of credit that has been transferred into the country's international reserves, an official said Friday.

The governor of the Central Bank of Seychelles, Caroline Abel, told a news conference that as of Wednesday the country's reserves stand at $488 million, amongst which $435 million can be used.

The line of credit had been negotiated previously but not drawn on until now.

"Now that the economy is in a difficult situation, the government felt it was time to call on these funds and earlier this week we received the $6.9 million which has helped us to improve a little bit the reserves," explained Abel.

The credit facility will be used by the government of Seychelles – 115 islands in the western Indian Ocean – for budgetary purpose.

Abel said that amongst the $10 million which was disbursed earlier this month to support the local market, $9 million was bought by the commercial banks and the remaining $1 million was returned to the reserves.

Abel stressed that strict guidelines will be followed before the funds are transferred.  (Seychelles Nation) Photo License: CC-BY

"For us, this is an important point as we want to prolong to the maximum the use of the country's reserve so as not to exhaust the reserves," said the governor adding that they are estimating that this can be done over a period of 18 months.

As the reserves are being used to procure only three important commodities -- food, medication and fuel -- Abel said the Central Bank has already received requests from the Seychelles Trading Company (STC) for basic food commodities and Seychelles Petroleum Company (SEYPEC) for fuel.

"This week we had a discussion with SEYPEC and STC with regards to how much they will need and how much we can allocate. SEYPEC has submitted their demand for $3.7 million," Abel said, adding that the bank is processing the request but have asked the company to submit all relevant documentation and this request was made to both companies.

The governor explained that the petroleum company needed $5 million in total but had managed to use some funds from its own reserves.

According to Abel: "STC has advised us that they will need $1.3 million per month and an additional $4.3 million to ensure stock for six months." Abel stressed that strict guidelines will be followed before the funds are transferred.

During the press conference information was also given about the exchange rate adjustment. Abel warned and reiterated that it was important for the whole economy to make savings, reduce consumption to ensure moderate expenditures.