SUNBIZ

Monetary Policy Stance Remains Unchanged

Following its assessment of recent domestic and global economic developments along with the risks to the out­look of the monetary policy ob­jectives, the Reserve Bank of Fiji board has maintained
30 Sep 2018 13:41
Monetary Policy Stance Remains Unchanged

Following its assessment of recent domestic and global economic developments along with the risks to the out­look of the monetary policy ob­jectives, the Reserve Bank of Fiji board has maintained the over­night policy rate at 0.5 per cent.

On the domestic front, RBF Governor and chairman of the board, Ariff Ali remarked on the encouraging performance of the tourism industry.

This especially when tourist ar­rivals within a month reached an all-time high in July, followed by another record arrival for any August month.

Performance of sectors

Governor Ali added that the per­formance of other sectors were mixed, although broadly positive, and private sector credit growth accelerated in August since the slowdown noted from the end of last year driven largely by higher lending to business entities.

The bank’s monetary policy ob­jectives were intact in the review period.

Annual inflation fell to 4.3 per cent in August from 4.7 per cent in July.

Excluding alcoholic beverages, tobacco and kava, inflation re­mained low at three per cent.

Foreign reserves

As at September 28, foreign reserves were comfortable at around $2,117.5 million, suffi­cient to cover 4.9 months of re­tained imports of goods and non-factor services.

Outlook

In terms of the outlook and risks, Mr Ali noted that: “Eco­nomic sentiments in the coming months are expected to remain broadly balanced.

“Global economic growth con­tinues to be strong.

“However, downside risks have intensified due to worsening trade protectionism.

“Nevertheless, the Fijian econo­my is on track to achieve positive growth over the coming year.

Inflation

“Notwithstanding any supply side shocks, inflation is expect­ed to be around three per cent by 2019 while foreign reserves are projected to remain comfort­able over the medium term in line with the anticipated paths of tourism earnings and remit­tances.”

Governor Ali reiterated the Re­serve Bank’s commitment in safe­guarding its twin objectives and concluded that: “The RBF will continue to closely monitor glob­al and domestic developments and align monetary policy where appropriate.”

Feedback: maraia.vula@fijisun.com.fj



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