SUNBIZ

Weakened Fijian Dollar Increases Our Purchase Cost But Also Export Earning

The Fijian dollar continues the week lower by 25 points to settle at 0.5165 (FJD/USD) as of Thursday September 18. This brought its total September fall to a significant 1.19
20 Sep 2014 12:17

The Fijian dollar continues the week lower by 25 points to settle at 0.5165 (FJD/USD) as of Thursday September 18.

This brought its total September fall to a significant 1.19 cent decrease since beginning September at 0.5284.

This trend could continue to increase costs for purchase transactions denominated in USD. However on the flip side it should increase exporter earnings.

On the crosses, the FJD appreciates against the AUD by 15 points to open at 0.5724.

This continues to give relief to Fijian importers but could affect exporter earnings if the FJD continues to appreciate as forecasted.

The AUD continues to weaken despite the Australian economy churning better employment numbers.

For comparison purposes the AUD/USD fell almost 3.87 cents to now trading below 90 cents at 0.8960 as at September 18.

This signalled that a 3 cent fall in the AUD transforms into a 1 cent benefit for Fiji importers.

Against the NZD the FJD climbs a meek 30 points to open stronger at 0.6306. Similarly with the AUD the NZD remains supportive of transactions in NZD for Fiji.

Thus imports denominated in NZD are cheaper and is suspected to be the new trend for the next few weeks.

In terms of the NZD against the USD it has lost 2.76 cents or 1.11 cents less than the AUD against the USD.

Conclusively, the major threat would be; that the continued weakening of the FJD could impact oil purchases, as they will require more FJD to pay for oil imports in USD.

The oil bill is the largest for the Fiji Economy. The current dry spell affecting water levels, could increase the demand for oil and increase local vegetable prices.

– 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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