Wednesday, September 5, 2012

Fiji leaves interest rate steady, economy positive

     The central bank of Fiji left its Overnight Policy Rate (OPR) unchanged at 0.5 percent as the domestic economy remain healthy despite the softening in the global economy.
     “The global growth outlook remains clouded by underlying problems in the Euro zone and the associated flow-on effects on its trading partner economies. Having picked up in the early months of 2012, growth in the world economy has since softened,” the Reserve Bank of Fiji said in a statement, quoting its governor and chairman, Barry Whiteside.
    "The Board noted that despite the general pick-up in the economy in the year to date and positive sentiments for the near term, it is important that monetary policy remains supportive of the economic recovery," the bank added in a statement following a board meeting on Aug. 30.
     Fiji has held its OPR unchanged since November last year when it cut the rate by 100 basis points.

     Despite the weak global economy, Whiteside said the domestic economy was generally positive in the first half of the year and consumption remained high while investment was expected to strengthen in the second half of the year, supported by higher government capital projects and private investment.
     "Increased domestic credit to the private sector also augurs well for the economy going forward," the bank said following a meeting of its board on Aug. 30.
      Consumer prices rose by 4.0 percent in July from the same month last year, slower than inflation in previous months, the bank said, adding that "foreign reserves, at the current level of $1,512.4 million remain comfortable and are sufficient to cover 4.8 months of retained imports of goods and non-factor services."


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