That is how many Ariary one US dollar cost on 11 October, per the central bank (BFM). In late March it was 4,168. The dollar now costs 8.3% more, which gives back most of the 8.9% gain this newsletter opened with in June. A currency that rose on one-off aid inflows is now pricing the import bill instead: fuel, equipment and post-cyclone reconstruction. On Wednesday Madagascar marks one year since the military took power on 14 October 2025. The ariary is the clearest sign of what year two will be about.

Three things moved together over the summer. The ariary weakened. Inflation reached 8.6% in June, up from 6.8% in March, and core inflation (prices excluding food and energy) hit 11.4%. On 4 August BFM raised its key rate from 12% to 12.5%. Then on 30 September the IMF completed its combined third and fourth reviews and released about US$155 million. Its projections show the strain: inflation of 9.3% by end-2026, reserves down from 6.9 to 6.1 months of imports, and a current-account deficit widening from 6.0% to 8.3% of GDP.

Madagascar imports its fuel. A weaker ariary makes every litre more expensive. That cost reaches the pump: petrol rose from 5,100 to 5,300 Ar/litre on 5 September, after automatic fuel pricing returned in July. It also reaches JIRAMA, which burns fuel to make electricity. The IMF has said who should carry the cost. It wants full automatic fuel pricing by January 2027, a JIRAMA fix "without adding strain to the budget," and fewer tax breaks, because tax revenue fell well short of target.

The positive reading is fair. The exchange rate is absorbing the shock, the central bank acted early, and six months of reserves is still a real buffer. On the numbers, this is an orderly adjustment. The problem is politics. A vote is planned for July 2027, and this government came to power after protests over power cuts. Raising fuel and electricity prices before a vote is hard. Every price increase it delays goes onto a budget that is already short of money. Our view: the economic plan is sound, but the government has not yet shown it will carry it through politically. For investors and lenders, the risk in 2027 is not a currency crash. It is a budget gap filled with arrears, late payments to suppliers and contractors.

Worth watching: The January 2027 fuel-price deadline. If prices follow the formula, the IMF programme holds. If prices are frozen, politics has won and the next IMF review gets harder. Sooner: INSTAT's July–September inflation figures (not yet published) and BFM's next rate decision.

At the SADC summit in Durban on 17 August, the regional bloc supported Madagascar's reforms and called for a "return to constitutional normalcy." There, Colonel Randrianirina announced a first vote in July 2027 on the new constitution (he did not use the word "referendum"), with a presidential election before the end of 2027. On 13–14 October, the country holds its first "Fête de la Liberté," marking both 1958 and the October 2025 takeover.

For investors, the dates matter less than the rules. The real question is whether mining, tax and contract rules stay the same until the vote. A date announced in a speech can move. A date written into law is much harder to change.

Worth watching: An official election calendar from the electoral commission (CENI), published as a legal text. Until then, treat the dates as intentions.

Ambatovy, the country's biggest mine (nickel and cobalt), fully restarted on 11 June after Cyclone Gezani shut it for four months. Sumitomo's 54% stake has gone to AMRI, a group led by South Africa's Zungu Investments and Essenwood Partners. Sumitomo's filing values the deal at minus US$418 million, meaning Sumitomo paid to leave, and it booked a loss of about ¥70 billion.

When a seller pays to exit, it shows how heavy the mine's debts and repair costs are. The new owners are smaller than Sumitomo and are taking on a plant that produced about 28,000 tonnes of nickel in 2024, under half its 60,000-tonne capacity. For the government, Ambatovy is a major source of export earnings and taxes. Its future now depends on owners with less money behind them.

Worth watching: AMRI's funding plan and its first production target. If AMRI has to sell future output in advance to raise money, the mine is under financial strain.

Correction: Edition #1 Korea's KOMIR became majority owner after Sumitomo's exit. That was wrong. Sumitomo's 54% went to AMRI; KOMIR remains a shareholder.

The government restored a minimum farm-gate price for green vanilla for the 2026 season: 10,000 Ar/kg for long pods and 5,000 Ar/kg for short ones. It also plans to buy about 600 tonnes of unsold vanilla from exporters through the Alliance de la Vanille Malgache (AVM), using a fund reported at US$38 million. In return, exporters must buy about 3,000 tonnes of green vanilla from farmers in Diana and Sofia.

A minimum price only works if someone buys at that price. Here, that buyer is the state. So the minimum price lasts only as long as the AVM has cash. The bigger risk comes next year. If the AVM cannot sell its 600 tonnes, a government warehouse full of vanilla will keep world prices low in 2027. That would hurt the farmers the plan is meant to help. For buyers abroad, it means cheap supply will continue.

Worth watching: Whether the AVM sells its stock abroad or keeps it in storage, and where the US$38 million comes from. If it comes from the budget, it adds to the pressure described in our lead.

The number everyone cites is the 47% US tariff announced in April 2025. It overstates the average pain and obscures who carries it. The rate actually collected on Malagasy goods averaged around 16% in early 2026 (US customs data), because the burden is split by product. Textiles duty-free under AGOA until it expired on 30 September 2025 are hit hard, with industry bodies putting tens of thousands of formal jobs at risk. Vanilla and minerals, which historically entered at low or zero duty, are far more shielded, and miners are petitioning for a critical-mineral exemption. The strong ariary compounds the squeeze on the one exposed sector that employs urban formal workers.

The export zones employ about 100,000 people, most of them women. Clothing buyers order six to twelve months ahead. With access secured for two years, they can sign multi-season orders with Malagasy factories again. If the tariff position is confirmed, Malagasy clothing could enter the US closer to duty-free than at any time since April 2025.

The law renews the programme, but not each country's place in it. The US President decides every year who is eligible, using criteria such as rule of law and political pluralism. Mali, Guinea, Niger and Gabon all lost access after military takeovers. Madagascar has good arguments for staying in: Washington is competing for influence here (see its US$134 million health commitment in Edition #2), SADC backs the transition, and there is now a vote timetable. Our view: Madagascar will probably keep its place for 2027, but it is not certain. Until the decision is out, buyers will hesitate. For factory owners and investors, the real AGOA news is still to come.

Worth watching: The US decision on 2027 eligibility, usually published between late October and December. If Madagascar is on the list, expect new orders and hiring in the zones in early 2027. If it is not, the extension means nothing for Madagascar.

The power shortfall on the Antananarivo grid nearly halved in a year, from 44.9 MW to 23.5 MW (September 2025 to September 2026). But JIRAMA spends about 1,225 Ar to produce one kilowatt-hour and sells it for about 795 Ar. It loses about 430 Ar on each one, around 1,030 billion Ar a year (AllAfrica, 9 October).

Fewer power cuts look like progress, but most of the extra power comes from burning imported fuel. So the more power JIRAMA delivers, the more money it loses, and a weaker ariary makes each litre cost more. This also matters for private power producers : their contracts depend on JIRAMA being able to pay them.

Worth watching: The 2027 budget. It must either raise electricity prices or give JIRAMA more money. Higher prices are politically risky. More money breaks the IMF condition. Whichever it chooses tells us how serious the government is about the reform.

One year after 14 October, Madagascar has an IMF programme on track, AGOA renewed and fewer power cuts in the capital. That is real progress. But each gain comes with a bill. Either households pay, through higher fuel and electricity prices, or the budget pays, through support for JIRAMA and vanilla purchases. The IMF wants households to pay. With a vote nine months away, the government may prefer to delay. Year one was about stabilising the economy, and year two will be about who carries its cost. The clearest test comes in January, when fuel prices are due to follow the formula.