1 Cent – Seychelles

In 1977, Seychelles underwent a profound political and economic transformation with the coup that brought France-Albert René to power, declaring a socialist one-party state. This shift occurred against a backdrop of inherited economic structures from the colonial era. The country's currency, the Seychelles Rupee (SCR), was still pegged to the International Monetary Fund's Special Drawing Right (SDR), a basket of major currencies, a system established in 1974 to provide stability after the breakdown of the Bretton Woods system. This peg was managed by the Seychelles Monetary Authority, the precursor to the central bank.

Economically, the new government faced immediate challenges, including a heavy reliance on imports, a narrow economic base dominated by tourism and cinnamon exports, and a growing budget deficit. While the currency peg provided nominal stability, it also limited monetary policy flexibility. The state's new socialist direction, emphasizing nationalization and expanded public services, began to strain foreign exchange reserves. This was because increased government spending and imports, without a corresponding rise in export earnings or tourism revenue, started to create underlying pressures on the rupee's fixed exchange rate.

Consequently, by the end of 1977, the currency situation was one of latent vulnerability. The formal peg remained intact, providing surface-level calm, but the fundamental economic policies of the new regime were setting the stage for future balance of payments difficulties. The inherent tension between a fixed exchange rate, a socialist-expansionist fiscal policy, and a vulnerable, open island economy would define Seychelles' monetary challenges in the years to follow, ultimately leading to a severe foreign exchange crisis and a series of devaluations in the early 1980s.