Business

Foreign reserves remain adequate, imports increase by 49.2 percent

May 27, 2022 6:50 am

Reserve Bank of Fiji. [File Photo]

Reserve Bank of Fiji Governor Ariff Ali says foreign reserves remain adequate, totalling $3,018 million, enough to support 8.3 months of imports of goods and services.

However, the RBF stated that the global outlook remains highly uncertain, with no signs of an end to the war in Ukraine and abrupt changes to trade policies having a disastrous flow-on effect on the rest of the world, including Fiji.

Ali says private sector lending has gained traction, increasing by 2.3 percent in April and contributing to the economic recovery.

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The banks remain adequately flush with liquidity to lend, keeping interest rates at historically low levels.

Ali reassured that while the RBF has noted an increase in non-performing loans, the banking system remains sound on the back of adequate provisioning and a favourable capital adequacy ratio.”

The RBF says foreign exchange holdings are expected to remain at comfortable levels in the near to medium term despite the recent increases in commodity-related import payments, offset partly by the continuing rise in tourism receipts.

Ali concluded that with no immediate threats to our core monetary policy objectives, the bank’s monetary policy stance remains focused on supporting the domestic economic recovery.

The RBF will continue to monitor international and domestic developments and align monetary policy accordingly.

Fiji’s merchandise trade deficit widened between January and February

Ali says imports rose strongly by 49.2 percent in the first two months of this year, reflective of the annual high global commodity prices and businesses’ restocking inventory in anticipation of higher demand as the economy is poised to grow.