In a statement today, Reddy announced foreign exchange reserves level boosted by the devaluation of the Fiji dollar in mid-April, and revealed the central bank is expected to maintain a tight policy hold in light of the current international economic conditions.
“Foreign reserves reached F$700 million as at 22 July. This compares with F$441 million ($215 million) before the devaluation,” he said. “This indicates that the policies put in place in mid-April have proven to be very effective in turning the reserve levels around.”
He cautioned that this should not mean that the Fiji economy is out of the woods.
“The impact of the global crisis is still being felt and will continue to do so for the next couple of years. Therefore, the policies will remain tight in the foreseeable future,” he said.
Liquidity also experienced a strong recovery to the current $200 million ($97.6 million), compared to its critical $15 million ($7.3 million) low earlier this year.
Reddy said this level of liquidity will allow for further reduction in lending rates and greater availability of credit and is expected to lead to higher investments and economic growth in due course.
The governor emphasized however that credit must go towards high priority sectors which create employment and save or increase foreign reserves.
