Friday, May 30, 2014

Fiji maintains accommodative stance, objectives intact

    Fiji's central bank maintained its policy rate at 0.50 percent and said the bank's twin objectives remain intact so "the current accommodative stance remains appropriate to support the domestic economic expansion."
    The Reserve Bank of Fiji, which has held its benchmark Overnight Policy Rate (OPR) steady since November 2011, also said price pressures are expected to remain stable with the year-end inflation forecast unchanged at 3.0 percent.
    Fiji's central bank has the twin objectives of stable inflation and foreign reserves. Last month the central bank said it would "re-align" monetary policy if there were challenges to its objectives.
    Fiji's inflation rate rose to 0.1 percent in April after a negative rate of 0.2 percent in March, helped by price rises on alcoholic drinks and tobacco, and certain non-foods.
    Barry Whiteside, governor and chairman of the reserve bank board, said in a statement that "domestic economic conditions continue the robustness shown last year" with private sector credit expanding by 11.6 percent year-on-year in April and the government's expenditure "notably" higher this year.

    Last month the central bank raised its 2014 economic growth forecast to 3.8 percent from a previous 3.0 percent. In 2013 the economy grew by 3.6 percent and the growth outlook for 2015 and 2016 was unchanged at 2.4 percent.
    Externally, Whiteside the global economy was continuing to recover in Fiji's favor as many advanced economies were showing signs of sustained recovery.
    Foreign reserves were around US$1.698.1 billion on May 29, sufficient to cover 4.6 months of imports, up from $1.652 billion as of April 24.



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