Rédaction Africa Links 24 with lexpress
Published on 2024-03-27 02:45:00
The ariary is appreciating against the euro and the dollar in the currency market. According to the Ministry of Economy and Finance, the repatriation of currencies has something to do with it.
The latest news shows that the ariary is recovering from its decline earlier this year. The Ministry of Economy and Finance announced a renewed vitality of the ariary against the euro and the dollar in the currency market. According to the latest central bank operation, completed yesterday, the euro is now trading at 4,684.35 ariary compared to nearly five thousand ariary earlier this year. This represents a gain of 225 points in the span of three months. The same goes for the dollar, which is being sold at 4,320 ariary compared to 4,574.21 ariary at the beginning of the year, a gain of 254 points. The exchange rates of foreign currencies continue to decrease in favor of the ariary.
Various reasons can explain this renewed vitality. According to financial economist Fidèle Randriamananjara, the country is currently in a cycle where imports are significantly reduced. Vital imported products such as rice are seeing a decline in import volume, since the last quarter of last year. “Transactions related to the import of various products are already closed two or three months in advance. Thus, for example, we anticipate the end of the lean season to reduce the importation of certain varieties of rice and promote local rice. We are currently in a phase where imports are gradually decreasing,” he said.
Regain of vitality
The Ministry of Economy and Finance, on the other hand, explains this performance, which it deems “encouraging,” by the repatriation and sale of currencies “which have significantly contributed to the appreciation and stabilization of the ariary… Concurrently, formal exports of products from various sectors (mining, agricultural, craft) will further increase the supply of currencies and support this remarkable performance of the ariary,” the department notes. Other factors can also explain this renewed vitality, such as currencies generated by the recovery and tourist flows. There is also the arrival of funds allocated to public investment projects. They are paid in dollars or euros. When all these currencies are received, the ariary gains value in the currency market.
The effects of this recovery of the ariary can have repercussions on the macroeconomic level. Inflation tends to continue to rise. In the short term, the effects of this increase in value of the national currency are imperceptible. “Nevertheless, if we extrapolate this trend to a projection, inflation will tend to slow down, even if only slightly,” says Fidèle Randriamananjara. Prices will rise more slowly. “When the ariary catches its breath, the same goes for the trade balance. This will also have repercussions on the balance of payments,” our interviewee continues.
However, in a context of fluctuation, the interbank currency market and its trends must reflect the national economy as a whole. For now, our economy depends on imports, especially in the energy sector, with petroleum products, but also in agri-food and other daily consumer products.
Read the original article(French) on lexpress.mg
