Mone­tary Pol­icy Stance Re­mains Un­changed

Fiji Sun - - Sunbiz -­tel@fi­

The Re­serve Bank Board at its monthly meet­ing on 31 March agreed to main­tain the Overnight Pol­icy Rate (OPR) at 0.5 per­cent. The Gover­nor and Chair­man of the Board, Mr Barry White­side stated, “the twin ob­jec­tives of mone­tary pol­icy are sta­ble and re­main within com­fort­able ranges at this time.

In­fla­tion was 1.2 per­cent in Fe­bru­ary and is ex­pected to rise only tem­po­rar­ily in the next few months due to short­ages in agri­cul­tural mar­ket items.

In ad­di­tion, for­eign re­serves are cur­rently (29 March) ad­e­quate at $2,006 mil­lion, suf­fi­cient to cover 5.6 months of re­tained im­ports of goods and non-fac­tor ser­vices.” Amidst the weak­en­ing global growth prospects and in­creased un­cer­tain­ties, Fiji’s ma­jor trad­ing part­ner coun­tries gen­er­ally con­tinue to main­tain ac­com­moda­tive mone­tary poli­cies to sup­port de­mand in their economies. An­tic­i­pated fur­ther down­ward re­vi­sions to the cur­rent global growth pro­jec­tions im­ply lower trad­ing part­ner de­mand for the Fiji econ­omy. Nev­er­the­less, do­mes­tic eco­nomic ac­tiv­ity is ex­pected to be un­der­pinned by sig­nif­i­cant re­con­struc­tion work and strong re­tail and tourism ac­tiv­ity. Con­sumer and in­vest­ment spend­ing is pro­jected to be ro­bust, sup­ported by aid in­flows and re­mit­tances, and cy­clonere­lated as­sis­tance in­clud­ing with­drawals from the Fiji Na­tional Prov­i­dent Fund and credit fa­cil­i­ties pro­vided by fi­nan­cial in­sti­tu­tions. In mak­ing the de­ci­sion, the Board took into con­sid­er­a­tion the cur­rent need for mone­tary ac­com­mo­da­tion to sup­port Fiji’s re­cov­ery given the im­pact of Trop­i­cal Cy­clone Win­ston as well as the re­cent global de­vel­op­ments and risks. The Gover­nor con­cluded that, “any change to mone­tary pol­icy will be guided by the de­vel­op­ments around the Re­serve Bank’s dual ob­jec­tives.”


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