Seychelles: 2026 Article IV Consultation, Fifth and Sixth Reviews Under the Arrangement Under the Extended Fund Facility and the Arrangement Under the Resilience and Sustainability Facility, and Request for a Waiver for Nonobservance of a Performance Criterion-Press Release; Staff Report; and Statement by the Executive Director for Seychelles

This paper presents Seychelles’ 2026 Article IV Consultation, Fifth and Sixth Reviews under the Arrangements under the Extended Fund Facility (EFF) and the Arrangements under the Resilience and Sustainability Facility, and Request for a Waiver for Nonobservance of a Performance Criterion. Seychelles has made strong progress toward key economic objectives, including a reduction of public debt, rebuilding foreign exchange reserves, strengthening the monetary policy framework and financial sector supervision, and advancing climate related reforms. Program performance under the EFF was strong. All but one quantitative target for the fifth and sixth reviews were met. All but two structural benchmarks were completed, with these remaining reforms expected to be finalized after program completion. Near- and medium-term risks have increased following the war in the Middle East. Seychelles remains vulnerable to disruptions in air travel and tourism activity, as well as higher commodity prices and shipping costs that could fuel inflation and weaken the external position. Sound monetary policy and continued exchange rate flexibility are essential to contain inflation and absorb external shocks while anchoring the level of international reserves at about four months of import cover.