The Reserve Bank of Fiji will continue to reduce exchange controls in lieu of the relatively comfortable foreign reserves position.
Our foreign reserves are around $1.5billion and are sufficient to cover a little over five months of retained imports of goods and non-factor services.
RBF Governor Barry Whiteside said that in view of the reserves position, the central bank had further reduced some exchange controls.
“RBF will continue to work with banks and other key stakeholders to reduce uncertainties considered as hindrances towards increasing investment,” Mr Whiteside said.
“RBF maintains an open door policy in regards to new entrants to the financial system in Fiji, provided that potential licensed entities meet relevant legislative and regulatory requirements.”
He said every individual and business in the country must make a difference to raise investment, and ensure that Fiji’s economic growth is sustainable.
“RBF has continued with its accommodative stance with regard to monetary policy to encourage banks to lend more and stimulate growth,” Mr Whiteside said.
“In the current situation of high liquidity in the banking system, the central bank will remain vigilant to any signs of inflation coming through domestic pressures.”
Liquidity in the banking system, measured by bank demand deposits held at the Reserve Bank, is currently around $522 million.
This liquidity stems from growth in reserves coupled with weak demand for credit from the domestic economy.
“This can be seen in low annual growth rates in commercial bank lending but we have, however seen some pick up in recent months,” Mr Whiteside added.
The RBF and the International Monetary Fund are projecting a 2 per cent growth in 2011.