Exchange rate : The Ariary is once again on the path to competitiveness

The current evolution of currency prices and the policies pursued by the Banky Foiben'i Madagasikara are rather in favor of the stabilization of the ariary in the second half of the year 2023.

Moderate depreciation

The statistics published in the latest economic situation note from the Central Bank make, in any case, state of moderate depreciation of the ariary, which thus continues to resist compared to reference currencies.

“Over the first half of the year, the national currency depreciated respectively by -1,1 % and -3,3 % compared to the US dollar and the euro”, specifies the Central Bank which gives, to the 30 June 2023, average 4 462 ariary for a dollar and 4 883,9 for one euro.

A trend that has continued over the last two months since the interbank currency market closed, last Monday, the national currency even managed to nibble a few points against the dollar with a parity of 4 444,57 ariary (against 4 462 ariary in June). With the euro, it is rather a quasi stability with a course of 4 885,10 ariary (against 4 883,9 in June). A stability which has every chance of being maintained over the coming months of the year.

Better prospects

Indeed, despite a situation that is not yet very promising, the measures envisaged by the BFM allow us to believe in much better prospects.

“Despite the slowdown in price developments, observed between April and June of this year, inflation remains high and needs to be contained further so as not to hinder the recovery of the economy”, specifies the financial institution which intends to strengthen anti-inflationary initiatives.

“The measures taken by the BFM for several months are starting to produce results, but involve new interventions to better stabilize the ariary and bring this inflation as close as possible to its pre-2020 level”.