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Madagascar: the Malagasy currency, Political diversion or reality?
The Malagasy currency, the Ariary, is appreciated against the euro and the dollar on the interbank currency exchange market (MID). The Euro was worth 2801.65 Ariary, while the dollar was at 2161.42 Ariary. A week later, the value of the Euro dropped to 2578.25 and the dollar fell to 2018.85 Ariary, the Central Bank has reported.
A specialist in the economics’ environment, Dr. Hugh Rajaonson, Cabinet director of the Minister of Finance and Budget, explained that the return of tourists has increased foreign exchange earnings.
The Ariary appreciation is also explained by the resumption of some international aid and the reduced leakage in foreign currencies, helped by a lull in politics, said Rajaonson.
“The prospect of a cautious supplementary budget law, reducing the budget deficit, and good technical cooperation between the Central Bank and the Ministry of Finance and Budget, helped for more serenity”, he added.
From his side, the secretary general of the Ministry of Finance and Budget said that normally the Malagasy currency depreciation was expected because all business companies place their orders by this period, and this should increase demand for foreign currency on the “MID”. However, some traders doubt the assessment was forged by the intervention of the Central Bank to hide the negative consequences of the political crisis in the country.
“Be careful, on crisis periods, we always face an artificial assessment made by different levels of the rulers to make us trust the economic stability”, the traders highlighted”, “We do not believe, at this special period where the crisis is at the “neck of the bottle” that the Malagasy currency is gaining already over the euro and the dollar, which have significant value in the “MID”.
In such similar situations, it is indicated to wait for a couple of weeks to see if we deal with a real economic stability or just a manoeuvre to lure the economic actors in particular, and the citizens in general…