That is what one euro cost on Wednesday 14 October (BFM reference rate). It is the first time since February that the euro has been above Ar 5,000. The dollar was at Ar 4,544. Since late March, the dollar has gained 9.0% against the ariary and the euro 5.7%. This week alone, the ariary lost about 0.6% against both.

Last week's edition said the ariary's strong months were over. This week confirms it. Europe is where Madagascar buys medicine, machines and spare parts, so those imports are getting more expensive again, with inflation already at 8.6% (June, the latest official figure). Exporters paid in euros, such as textile firms and vanilla houses, gain a little. Households lose more.

An IMF team led by Constant Lonkeng visited Antananarivo from 5 to 9 October. Its statement on 12 October said red tape is slowing the 2026 budget. The numbers back that up. Going into the last quarter, the state had spent only 44.2% of its 2026 budget. For investment paid for by donors, the figure was 20.3%. More than Ar 1,000 billion is reported stuck in the system. On the revenue side, net tax collection reached 45.6% of the yearly target by mid-year. The IMF also wants the automatic fuel-price formula fully back by January 2027 and faster work on JIRAMA's recovery plan. This was a staff visit, not a forrmal review. The fifth review is expected "in the coming months."

There is a reassuring reading. Slow spending keeps the deficit small, so it helps Madagascar meet its IMF budget targets. And 45.6% of the tax target by mid-year is behind, but not far behind. Seen this way, the budget looks under control. Our view is less comfortable. The IMF itself is asking for faster spending, which tells us the problem is not too much money going out, but too little reaching projects. The government already cut its 2026 growth forecast from 4.8% to 3.8%. A state that cannot spend donor money at more than 20% will struggle to convince donors to send more. The minister's Bangkok remarks also read like an early request for softer terms in the fifth review.

Worth watching: The 2027 budget (LFI 2027). The National Assembly opens its 60-day session on 20 October, and with no Senate, it decides alone. If there is no vote in time, the budget can be passed by ordinance. Two lines will show intent: new tax measures (the government says it will use AI against tax and customs fraud) and the money set aside for JIRAMA. JIRAMA still spends about Ar 1,225 to make one kWh and sells it for about Ar 795. Either tariffs rise in 2027 or the budget pays, and the IMF has said it does not want the budget to pay.

In Antsohihy on 13 October, Colonel Michaël Randrianirina refused a round table with the political parties. He said there is no political crisis, only a social one, and backed the national consultation led by the churches (FFKM). Seven political groups had already warned that the "Refondation" could "die in the egg." On 14 October, the first "Fête de la Liberté," he spoke of "a new form of colonisation." The President has also asked citizens to report ministers who do not do their jobs or take bribes. The planned timeline: consultations done before December, a vote on the new constitution in May–July 2027, and a presidential election before the end of 2027. CENI has provisionally registered 7.16 million voters.

Calling it a "social crisis" puts the focus on prices, power and jobs, which ties the political timeline directly to the economic one. That is a risk: if fuel or power prices rise in January to satisfy the IMF, the social crisis gets worse just as the vote approaches. The colonel has still not said whether he will be a candidate.

Worth watching: A cabinet reshuffle before the end of the year, and the 87 VFM seats in the 163-seat Assembly. Removing the Assembly's leadership needs 109 votes, so any such move would show who is building alliances before 2027.

On 12 October, Harena Rare Earths said it had received the mining permit for its Ampasindava project in the north-west. First output is targeted for 2028. Its January study put the start-up cost at US$142 million, for a mine planned to run about 20 years and produce rare earths including dysprosium and terbium, which go into magnets for electric cars and wind turbines. Harena forecasts US$220 million in royalties and US$320 million in corporate tax for the state. The US development bank DFC has already committed up to US$4.84 million. This comes as Washington widens its ties: AGOA runs to the end of 2028, a US$134.3 million health agreement covers 2026–2030, and Energy Fuels is pursuing the Vara Mada (Toliara) mineral sands project.

This is the first big mining permit we have seen since the permit freeze ended in January. For investors, it shows that the transition government can move a large project forward. For the US, Madagascar offers heavy rare earths at a time when it wants supply chains outside China.

The positive reading is strong: a permit, a US backer and a date. But a mining permit is not a green light to build. Harena still needs its environmental permit, and Ampasindava sits in a sensitive forest and fishing area in the north-west, where local opposition has slowed projects before. The tax numbers also need context. If US$220 million in royalties is spread over the mine's planned life, the state earns closer to US$10–15 million a year, which is useful, but not budget-changing.

Our view: Ampasindava is a real signal that the door is open again for mining, but 2028 is an ambitious date. The bigger test for US–Madagascar ties is Vara Mada, which still has no final investment agreement and needs approval from the High Constitutional Court and Parliament.

Worth watching: The environmental permit and the start of community consultations at Ampasindava. Sooner: whether a Vara Mada agreement is put before the Assembly in the session that opens on 20 October.

Nickel traded at about US$15,322 a tonne on 16 October, down 5.8% in a month. Vanilla is close to its lowest level in more than a decade: extraction-grade beans sell for around US$30/kg, near 2012 levels, even with the Ar 10,000/kg floor for farmers. Ten Malagasy firms are at SIAL Paris (17–21 October) hoping for US$3.5 million in orders.

Low nickel prices hurt Ambatovy just as its new owners, AMRI, take charge of a mine that was shut for four months by Cyclone Gezani. Cheap vanilla hurts the SAVA region, where the price floor only holds while the state's buyer, AVM, has cash. Fewer export dollars also means less support for the ariary, which links back to this week's number.

Worth watching: Since late September, vanilla and clove export licences are issued online through the new "Alalana" platform. Watch whether licences come out faster in the first weeks of the export season. Delays would push buyers toward Indonesia and Uganda.

Since 1 October, Orange sells 1 GB for Ar 1,000 (valid 24 hours) and 20 GB for Ar 30,000 (30 days). A year ago, 1 GB cost almost Ar 5,000. Only about 20% of Malagasy people use the internet. A new telecoms bill (No. 040/2026) is waiting for the National Assembly.

Cheaper data matters more than it looks. It helps outsourcing (BPO) firms, which are one of the country's few growing service exports, and the many small sellers who run their businesses on Facebook and WhatsApp. If the new law opens the market to new operators, prices could fall further.

Worth watching: The text of bill 040/2026, and whether it allows new licences or new shared infrastructure (towers, fibre). Also: the US decision on 2027 AGOA eligibility, expected between late October and December.