RBF announces relaxation of monetary policy

- Central Banking staff
- 01 Sep 2000

The Reserve Bank of Fiji announced a relaxation of monetary policy. The monetary policy easing is in line with the Reserve Bank's assessment that financial pressures have eased and that risks to the economic outlook and to foreign reserves have abated somewhat. Fiji's foreign exchange reserves are currently over $800 million with projections showing reserves still around this comfortable level at year-end. With the outlook for foreign reserves more secure, and underlying inflation pressures subdued, there is now scope for the Bank to start relaxing the measures put in place on May 22.

Effective from September 1:

* The Bank's policy target interest rate has been reduced by 1 percentage point to 4 percent; * The Minimum Lending Rate, repurchase and rediscount rates have been reduced to 10 percent, from 15 percent; and *The Bank has re-delegated certain exchange control approvals to commercial banks and authorised foreign exchange dealers. Details are attached.

These measures should help reduce bank funding costs and support recovery. The credit ceiling on bank lending will remain in place for the time being but is expected to be reviewed in coming months, in line with improving economic and financial conditions.

Enquiries to:Mr Sada Reddy(Deputy Governor)(679) 313 611

Mr Steven Morling(Chief Manager, Economics)(679) 313 611

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