Influence on exchange rate fluctuations

A trade balance deficit in favor of import value. The latest available data has not improved this crucial macroeconomic indicator.

The significant decrease in white rice imports has not had a substantial impact on the trade balance. During the first six months of 2024, Madagascar’s imports recorded a value of 1,939.4 million USD FOB [Free On Board]. At the same time, export revenues, with the same unit of measure, were valued at 1,219.4 million USD.

According to the latest estimates published by the Banky Foiben’i Madagasikara (BFM), Madagascar experienced a trade deficit of 720.2 million USD during the examined period. This substantial financial gap certainly influences exchange rate fluctuations in the interbank currency market. Indeed, the ariary has suffered significant declines against the dollar and the euro. Since last week, the European currency has climbed to 4,924 ariary after stagnating for a month below 4,800 ariary.

Concerns are heightened by another worrying observation. According to the Central Bank, Madagascar’s trade deficit increased during this period, reaching 720.2 million USD, which is 4.1 % of the country’s GDP.