The Reserve Bank of Fiji has agreed to maintain the Overnight Policy Rate at 0.5 per cent.
RBF Governor Barry Whiteside said any change to monetary policy will be guided in particular by the developments on the outlook for inflation and foreign reserves.
RBF’s projections for both inflation and foreign reserves remain within comfortable levels in the near and medium term.
Inflation was 1.5 per cent in September and is forecast at two per cent by year-end.
Foreign reserves are currently (October 29) around $1,989.7 million, sufficient to cover six months of retained imports of goods and non-factor services, based on recent revisions to our macroeconomic forecasts.
Mr Whiteside pointed out that domestic economic conditions remain robust despite the recent downgrade of global growth by the International Monetary Fund and further slowdown in China and major trading partner economies.
“Aggregate demand continues to be propelled by buoyant consumption and investment activity,” he said.
“It is supported by favourable monetary conditions, and generally positive sectoral performances especially tourism and remittances.”
Mr Whiteside said potential risks to our growth outlook include the subdued outlook for trading partner economies.
This, he said, was coupled with the Fijian currency appreciation against the Australian and New Zealand dollars and weakening against the United States dollar and a pickup in commodity prices.
“Domestically, the risks from natural disasters including adverse climatic conditions, such as the prolonged El-Nino which has affected our sugar sector, remain a concern,” he said.