Floatation of Seychelles Rupee causes value to plummet
ON Monday the Seychelles government took the decision to let the rupee trade freely as part of measures taken in securing an IMF emergency loan. The currency had previously been pegged to the euro, pound and dollar based on foreign exchange revenue from tourism and trade. By midday on Monday, the first day of free trading, the rupee was at 19.9 to the euro (from 11.3 last week), 25.02 to the pound (from 14.3) and 15.6 to the dollar (from 8.9). By late afternoon it had depreciated further to almost 20 dollars to the rupee. It is expected that the rupee may depreciate further before settling.
Although most visitors to Seychelles will now get more rupees for their foreign currencies, prices of goods have already started to rise. Furthermore, many accommodation establishments and tourist resorts have always charged in major foreign currencies.
