Home » The euro climbs to 5,000 ariary

The euro climbs to 5,000 ariary

by drbyos

The ariary continues to fray on the interbank currency market. A tumble which is due to the deficit in the national trade balance according to experts.

A dangerous waltz. The ariary continues to depreciate against the euro. In a few days, the euro rose to 4,900 ariary or even more. A tumble that pushes more and more the national currency to reach the fateful bar of 5,000 ariary. The last operation completed yesterday for Banky Foiben’i Madagasikara (BFM) reported an exchange rate of 4,972.88 ariary for one euro. Compared to the previous month, the exchange rate rose by 4,762.51 ariary, an increase of almost 300 ariary in the space of a month. The single currency which continues to gain points on the Interbank currency market to the detriment of the national currency. For some economists, this phenomenon could be explained by the increase in the value of imports on the national market which led to the growth of inflation. Inflationary pressures have indeed been felt in the local economy since the end of 2022. By consulting the figures published by the Central Bank on its website, this information is supported. According to the annual supplement for 2022 in the BFM report, the value of imports rose to more than 21 million ariary against 16,043,811 ariary for 2021. For their part, exports from the Big Island have fallen sharply, according to figures published in the BFM’s economic outlook note, they fell by 13.4% in the first quarter of 2023.


Setbacks which could also impact the course of the national currency on the MID. The deficit on the trade balance is widening, because of these circumstances, which contributes to pushing the ariary to fray day by day compared to the reference currencies. Indeed, the flagship export products for Madagascar such as vanilla, cloves, cobalt and the products of free enterprises have withdrawn to the international market due to various factors. This depreciation of the ariary is not without consequences. The repercussions of these imbalances between supply and demand on the national economy are strongly felt with inflation and soaring prices. The current inflation rate is 11.8%. The International Monetary Fund (IMF) had already proposed some ways to fight against this frenzied inflation affecting the economy. According to the estimate of this Bretton Woods institution, one of the key points remains budgetary transparency and the strengthening of social safety nets.

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