Since the beginning of November 2023, Madagascar has recorded a sharp depreciation of the ariary against the euro. On the interbank currency market, one euro is now exchanged for 4,984 ariary, flirting with the fateful mark of 5,000 ariary, when last year, at the same period, it was worth 4,650 ariary. A jump that worries the population, already stunned by a current inflation rate of 12%.
2 mins
With our correspondent in Antananarivo,Sarah Tétaud
The reasons for such depreciation are multiple. Among them, there is in particular that of the Malagasy trade balance, in perpetual imbalance. A phenomenon amplified during this end-of-year holiday period, explains David Rakoto, professor of economics at the University of Antananarivo.
“ There are more imports than exports compared to usual during these holidays. To be able to acquire foreign goods, you must purchase them with foreign currencies. And for this reason, the demand for euros has increased, compared to the supply of currencies on the interbank currency market “, he said.
Lack of currency
Exports of vanilla and lychees, below usual volumes, were not enough to make up for the lack of foreign currency. Result : ” In Madagascar, we have never reached an exchange rate as low as currently, since 1980 and the establishment of the interbank currency market. If this situation can benefit some, like exporters for example, for the majority of Malagasy people, the immediate effect is inflation. And that’s why we reached a very high inflation rate of 12%. », continues David Rakoto.
The governor of the Central Bank of Madagascar, Aivo Andrianarivelo, however, wants to put the situation into perspective: “ There is always what we call the psychological impact of a rate. And the psychological impact, for the population, is the variation of the euro, more than the dollar. We, at the Central Bank, only manage the dollar/ariary parity. However, the depreciation of the ariary against the dollar is minimal : you don’t have to worry about that because it remains stable. »
In the country, almost 60% of the transaction volume is carried out in dollars, compared to 40% in euros. If the situation is far from being dramatic in the eyes of the governor, the continued depreciation of the dollar on the international market, as is the current trend, could worsen the situation for Madagascar in the coming months.
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