Business

Reserve Bank maintains stance

By RACHNA LAL The board of the Reserve Bank of Fiji has decided to leave the Overnight Policy Rate (OPR) unchanged at 0.5 per cent, following its monthly meeting held
04 Sep 2012 12:23

By RACHNA LAL

The board of the Reserve Bank of Fiji has decided to leave the Overnight Policy Rate (OPR) unchanged at 0.5 per cent, following its monthly meeting held on August 30.
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 was important that monetary policy remained supportive of the economic recovery.
The central bank, in a statement said in the coming months, the board would continue to assess global and domestic development and align monetary policy accordingly.
The governor and chairman of the board, Barry Whiteside, said: “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.”
Mr Whiteside highlighted that despite the global setbacks, domestic real sector outcomes were generally positive in the first half of the year.
“Consumption spending remained elevated while investment activity is expected to strengthen in the second half of this year, supported by the pick-up in Government capital projects and several major private investment activities,” he said.
Mr Whiteside indicated increased domestic credit to the private sector also augured well for the economy.
“The cash-based trade data for the first half of the year showed threat to Fiji’s external sector with the background of slowing global growth is limited for now,” he said.
“Foreign reserves, at the current level of $1.5 billion remain comfortable. Consumer prices rose by four per cent in July from a year earlier.




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