At­tor­ney-Gen­eral of­fi­ci­ates re­brand­ing of Mer­chant Fi­nance > P12, 13 BUSI­NESS:

Fiji Sun - - Front Page - MARAIA VULA Ra­tionale

The At­tor­ney-Gen­eral and Min­is­ter for Econ­omy Aiyaz Sayed-Khaiyum has ap­plauded the Stan­dard and Poors (S&P) Global Rat­ings for rais­ing Fiji’s long-term lo­cal-and for­eign­cur­rency sovereign credit rat­ings to ‘BB-’ from ‘B+’. Mr Sayed-Khaiyum made this an­nounce­ment at the launch of the Mer­chant Fi­nance logo at Suva’s Grand Pa­cific Ho­tel last night. Ac­cord­ing to the S&P Global Rat­ings re­port that was pub­lished in the Fiji Sun on Mon­day, the out­look on the long-term rat­ings is sta­ble. The S&P re­port said: “At the same time, we af­firmed our short-term sovereign credit rat­ings at ‘B’. We also re­vised our trans­fer and con­vert­ibil­ity (T&C) as­sess­ment to ‘BB-’ from ‘B+’.”

Mr Sayed-Khaiyum also high­lighted that Fiji has a ro­bust fi­nan­cial system. As key stake­hold­ers, he said we need to also un­der­stand that the fi­nan­cial in­sti­tu­tions ac­tu­ally man­age it in a pru­dent and trans­par­ent man­ner, and that’s what gives con­fi­dence. Mr Sayed-Khaiyum said S&P gave

th­ese rat­ings be­cause of the fis­cal con­sol­i­da­tion in the 2019-2020 Na­tional Bud­get and con­sis­tency in pol­icy.

Mr Sayed-Khaiyum said a few months back there was a bit of panic in the mar­ket with in­ter­est rates go­ing up, but that has all sta­bilised now.

He high­lighted that the liq­uid­ity rate is in excess of $600 mil­lion nearly dou­ble to was it was at the end of last year.

In­fla­tion sits at 0.7 per cent while for­eign re­serves at $2.2 bil­lion. He noted that Fiji was in a good space from that per­spec­tive.

The S&P re­port said: “The sta­ble out­look re­flects our ex­pec­ta­tion that Fiji’s econ­omy will con­tinue to grow dur­ing the next 12 months, and that the govern­ment’s medi­umterm fis­cal con­sol­i­da­tion plan will re­sult in a sta­bil­is­ing debt bur­den. “We also ex­pect the coun­try’s ex­ter­nal po­si­tion and for­eign-ex­change re­serves to re­main sound. “We could raise our rat­ings within the next 12 months if Fiji’s in­sti­tu­tional set­tings con­tinue to im­prove, which would help to sup­port pol­icy stability and eco­nomic growth.

“We might also raise the rat­ings if the Govern­ment loosens its for­eignex­change re­stric­tions while main­tain­ing a healthy level of re­serves or if fis­cal con­sol­i­da­tion pro­gresses faster than we cur­rently ex­pect, re­sult­ing in a de­clin­ing debt bur­den. “We have greater con­fi­dence in pol­icy con­ti­nu­ity in Fiji fol­low­ing the elec­tions of Novem­ber 2018. The Fi­jian econ­omy is en­ter­ing its 10th con­sec­u­tive year of growth, de­spite the se­vere dam­age in­flicted by Trop­i­cal Cy­clone Win­ston in 2016.

“While the govern­ment had sought to in­flu­ence mon­e­tary pol­icy in the past, we be­lieve the Re­serve Bank of Fiji has gen­er­ally demon­strated improving op­er­a­tional in­de­pen­dence dur­ing the past decade. We ex­pect net Govern­ment debt to be roughly sta­ble as the govern­ment be­gins to con­sol­i­date its fis­cal po­si­tion.

“Our rat­ings on Fiji re­main con­strained by its middle-in­come econ­omy, with per capita Gross Do­mes­tic Prod­uct (GDP) of around US$6,000, a po­larised po­lit­i­cal land­scape, and lim­ited mon­e­tary pol­icy flex­i­bil­ity. Th­ese weak­nesses are partly mit­i­gated by the Govern­ment’s sta­ble in­ter­est ex­penses, which should fall fur­ther as it ac­cesses more low-in­ter­est lend­ing, as well as its sound ex­ter­nal po­si­tion,” the S&P re­port said.

Photo: Kel­era So­vasiga

Fi­jian Hold­ings Lim­ited Group chief ex­ec­u­tive of­fi­cer Nouzab Fa­reed at the launch of the Mer­chant Fi­nance logo at Suva’s Grand Pa­cific Ho­tel on Au­gust 27, 2019.

Photo: Kel­era So­vasiga

From left: At­tor­ney-Gen­eral and Min­is­ter for Econ­omy Aiyaz Sayed-Khaiyum, Gover­nor of the Re­serve Bank of Fiji Ariff Ali, Fi­jian Hold­ings Lim­ited Group chief ex­ec­u­tive of­fi­cer Nouzab Fa­reed and Mer­chant Fi­nance chair­man San­jit Pa­tel at the launch of the Mer­chant Fi­nance logo at Suva’s Grand Pa­cific Ho­tel on Au­gust 27, 2019.

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