“The soundness of a nation's currency is essential to the soundness of its economy. And to uphold our currency's soundness, it must be recognised and honoured as legal tender”.
The foregoing is attributed to Alan Greenspan Chairman of the Federal Reserve System (Central Bank) of America on the occasion of the unveiling of the new US$20 note in Washington DC on May 13, 2003.
Hence, according to Alan Greenspan's yardstick the economy of Seychelles is unsound because our currency is not “recognised and honoured as legal tender”. In fact even our government no longer recognises nor does it honour our currency as legal tender. New regulations have been published compelling hotels and other tourism industry operators to deliver the GST they collect from their clients to government in foreign currency. This has created some problems because local patrons pay in rupees. How do the operators convince the government they have legitimate local patrons? So hotels are resorting to asking patrons to provide an ID to prove they are not a foreigner. Now in the hotels the Seychellois has become foreigners for the purpose of paying a bill.
Most people don't know that no one can legally force anyone to pay in foreign currency. According to the (Seychelles) Central Bank Act 2004, rupee notes and coins is the legal tender. Article 18 (1) defines legal tender as “a debtor is legally entitled to discharge any monetary debt and a creditor is obliged to accept payment of any monetary claim”. The next very article, Article 19 also says, “The Bank shall have the sole right to issue legal tender notes and coins denominated in Seychelles rupee. No other person shall in Seychelles issue notes or coins or any documents or tokens which are likely to pass as legal tender.”
Does it mean that the foreign exchange regulations which are being enforced against non-residents preventing them from settling their monetary debts in local currency is a fraud committed by our government against foreigners or so called non-residents? Which law has precedence, the Central Bank Act or the foreign exchange regulations? It is perhaps time to test it in court.
Furthermore, the Charter of Fundamental Rights and Freedoms decrees that (Article 27) “Every person has a right to equal protection of the law including the enjoyment of the rights and freedoms set out in this Charter without discrimination on any ground except as is necessary in a democratic society.” Every person, means anyone who is legally entitled to be in Seychelles. And tourists are legitimate residents of Seychelles under the constitution, albeit until their visa expires. Under the foreign exchange regulations they are being treated differently.