The Reserve Bank of Fiji Board has agreed to keep the Overnight Policy Rate (OPR) unchanged at 0.5 per cent.

Governor of the Reserve Bank, Barry Whiteside, said the monetary policy can remain accommodative for now to continue supporting growth.

This, he said was given the comfortable outlook for inflation and foreign reserves.

Inflation was 0.7 per cent in August and Mr Whiteside said this is forecast to be below three per cent by year-end.

Foreign reserves were around $1,741 million on September 25, sufficient to cover 4.7 months of retained imports of goods and non-factor services and are projected to remain at comfortable levels over the medium term.

“The domestic economy is largely on track to achieve the 3.8 per cent growth forecast for this year following the 4.6 per cent expansion last year,” he said.

“Consumption and investment spending by businesses and households continues to be firm and supported by strong credit growth, while sectoral performances of sugar and tourism have exceeded expectations.”

Confidence

Meanwhile, Mr Whiteside feels the successful transition to parliamentary democracy following the General Elections will raise business and consumer confidence further over the coming year.

He, however, cautioned that there are a few challenges moving forward.

“In the external sector, the continuous higher growth in imports relative to exports and the prolonged weakness in the global economy have potential to affect our balance of payments position in the medium term,” he said.

“Domestically, the on-going drought is also a cause for concern.”

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