SUNBIZ

September Foreign Exchange Spotlight

Exchange rates are driven mainly by economic, financial and geo-political events. However, the Fiji dollar (FJD/USD) does not operate as a floating currency which is determined by supply and demand.
13 Sep 2014 10:28

Exchange rates are driven mainly by economic, financial and geo-political events.

However, the Fiji dollar (FJD/USD) does not operate as a floating currency which is determined by supply and demand.

Peter-FuataBut rather on a fixed exchange rate, which is derived from the net movement of currencies in the FJD basket.

The basket comprises of the USD, JPY, EUR, AUD and NZD. However their weightings are only known to the Reserve Bank of Fiji.

Unique currencies like the Kina (PGK/USD) operate under a semi float regime.

This month it’s worth highlighting the Fiji Dollar (FJD/USD) as it continues to weaken.

It fell by 49 points from the beginning of the month to 0.5235 as at September 11.

Its weakness makes imports in USD expensive but helps Fiji’s exports that are received in USD.

Given that the basket is weighted heavily on our key trading currencies, it makes sense to cover them.

– This is an informative publication, sponsored by The Fiji Sun, Fiji Bureau of Statistics and HFC Bank. All views expressed or implied are purely of the Treasurer at HFC Bank, Peter Fuata.

 



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