Thursday, July 25, 2013

Fiji holds rate steady on positive economic outlook

    Fiji's central bank held its Overnight Policy Rate (OPR) steady at 0.5 percent, saying the current accommodative stance was appropriate as inflationary pressures remained in check, foreign reserves were at a comfortable level and the economic outlook was positive.
   The Reserve Bank of Fiji, which has maintained its rate since December 2011, said investment activity was "extremely buoyant" with cement sales higher along with increased lending to the manufacturing, building, construction and real estate sectors, confirming the bank's estimate that investment to GDP ratio this year will exceed the government's target of 25 percent.
    "Domestic economic conditions were very positive and there was a growing sense of optimism and confidence about our economy," the bank's governor, Barry Whiteside said.
    Fiji's inflation rate was steady at 1.5 percent in June from May and the Reserve Bank has forecast Gross Domestic Product growth of 2.7 percent this year, up from 2012's 2.5 percent.
    The bank also said that liquidity in the banking system was adequate, putting downward pressure on market interest rates and commercial banks' deposit and lending rates were at historical lows.
    "Against this background, domestic credit has continued to gain momentum with robust commercial bank lending accounting for much of the surge in private sector credit," the bank said.


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