Excess of cash in Solomon Islands banks driven by high rates – IMF

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The current level of interest rates in the Solomon Islands has caused a “structural excess of cash” within the financial system, according to a statement from the International Monetary Fund.

In a statement released on November 12 on the conclusion of the island’s Article IV consultation, the IMF said the basket exchange rate peg remained appropriate, but there were some signs of instability within the financial system.

“Credit growth has slowed,” fund staff said. “Lending rates, particularly

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