Madagascar's national currency ended the first half of 2026 on a competitive note. Between January and June, the ariary appreciated significantly against the euro and dollar. At the close of the interbank forex market yesterday, the euro stood at 4,823 ariary compared to 5,309 ariary at the start of January. The dollar was at 4,248 ariary yesterday versus 4,579 ariary at the beginning of January.

In summary, over six months, the ariary appreciated by 9.2% against the European currency and 7.2% against the US dollar. According to currency traders, the ariary's strength is mainly explained by substantial foreign exchange inflows from export revenues in the last quarter of 2025 and the first quarter of 2026, a trend that continued through the second quarter. The mining and textile sectors, as well as vanilla, cloves, and tourism, contributed significantly to these foreign exchange earnings. The first half was also marked by fund disbursements from projects financed by technical and financial partners, alongside diaspora transfers representing substantial foreign exchange amounts.

According to the Banky Foiben'i Madagasikara, the dollar's improved competitiveness relative to the euro has contributed to this favorable ariary performance. As Central Bank Governor Aivo Andrianarivelo has explained, this achievement largely results from the normal forex market mechanism—supply and demand dynamics. When foreign exchange inflows exceed economic operators' needs, exchange rates naturally decline, strengthening the local currency.

Among the beneficial effects of ariary appreciation is the reduced cost of imports, including fuel, medicines, equipment, and raw materials used by businesses. Indeed, fuel prices have not surged dramatically during the Middle East conflict partly thanks to the ariary's strength. However, exporting companies are penalized by the national currency's appreciation, earning less in dollar transactions.

The question now is whether this ariary appreciation trend will persist. Economists maintain that stability matters more than temporary currency strength.