Fiji's central bank maintained its benchmark Overnight Policy Rate (OPR) at 0.5 percent, saying its twin monetary policy objectives remain intact despite a rise in credit and imports that have put some pressure on the balance of payments.
The Reserve Bank of Fiji (RBF), which has held rates steady since November 2011, added that inflation was forecast to remain "at comfortable levels throughout 2015" given soft global commodity prices and low inflation among trading partners.
As of Feb. 24, Fiji's foreign reserves amounted to $1.806.3 billion, sufficient to cover 4.5 months of imports, down from $1.842.5 billion as of Jan. 29.
The Reserve Bank of Fiji issued the following statement:
"The Reserve Bank of Fiji (RBF) Board at its monthly meeting on 24 February agreed to maintain the Overnight Policy Rate (OPR) at 0.5 percent.
In announcing the decision, the Governor and Chairman of the Board, Mr Barry Whiteside stated that aggregate demand continues to expand aided by higher consumption, investment and Government spending. As a result, credit and imports have risen and put some pressure on the overall balance of payments position. However, despite the risks, the outlook for the twin objectives of monetary policy remains intact for now.
Inflation was 0.2 percent in January but is expected to increase slightly from February onwards as the impact of free primary and secondary tuition falls out. Nonetheless, inflation is forecast to remain at comfortable levels throughout 2015 given the soft global commodity prices (oil and food) and low trading partner inflation. Foreign reserves were around $1,806.3 million on 24 February, sufficient to cover 4.5 months of retained imports of goods and non-factor services and are projected to remain adequate throughout 2015.
The Chairman concluded that, “the Reserve Bank will continue to monitor international as well as domestic developments and re-align monetary policy stance if needed.”