Fiji’s liquidity heads in positive direction
August 7, 2020 4:57 pm
Reserve Bank of Fiji Governor Ariff Ali. [File Photo]
Liquidity in the banking sector has risen to $956.4 million as of yesterday.
Reserve Bank of Fiji Governor Ariff Ali says banks have more money available to lend without needing to attract additional deposits by offering higher deposit rates.
Ali goes on to explain that cost of funds will fall and banks should be able to pass on benefits to customers in the form of lower lending rates.
The Governor says the central bank has not directly controlled or regulated interest rates since the 1980s but influences them indirectly through monetary policy stance.
Ali also says the current expansionary monetary policy stance through increased banking system liquidity can help reduce interest rates.
Interest rates on new loans for June reveal that banks have reduced rates to the lowest since the beginning of the year.