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Monday, September 29, 2008

Monetary Policy Stance remains unchanged

In a press release today, 29 September 2008, the Reserve Bank of Fiji has announced that it wishes to keep its monetary policy unchanged. Provided below is a copy of the press release issued by the Reserve Bank of Fiji.

MONETARY POLICY STANCE REMAINS UNCHANGED

The Reserve Bank of Fiji Board held its monthly meeting on 25 September 2008 and left monetary policy unchanged.

The Board noted the positive developments in the performance of certain industries, such as tourism, forestry, fishing and mineral water so far this year and was encouraged by prospects for next year, especially in tourism and gold.

In terms of the Reserve Bank’s twin objectives, the Board noted that inflation rose to an 18-year high of 9.5 percent in August from 7.8 percent recorded in July. The pick-up in inflation is also a reflection of the revised consumer basket of 2005. The Board recognises that there may be upside risks to the inflation outlook of 7.5 percent this year, given that oil and food prices are still high, despite easing somewhat recently.

There was some improvement in export performance in the first seven months of the year, but this was more than offset by the strong growth in imports, which was being driven by high food and oil prices. However, foreign reserves are holding up well at adequate levels.

The Board’s decision was guided by the outlook on balance of payments and inflation, which had not improved from the previous month. According to the Board, “High commodity prices continue to pose threats to both these objectives and will be closely monitored in the coming months”.

The Board once again emphasised the need to grow exports to assist in supporting the balance of payments.

RESERVE BANK OF FIJI

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Monday, September 15, 2008

Reserve Bank commences public awareness on new coinage structure

The Reserve Bank of Fiji has commenced public awareness on a new coinage structure.
Here is a copy of a press release issued by the Reserve Bank of Fiji on 11 September, 2008.

RESERVE BANK COMMENCES PUBLIC AWARENESS ON NEW COINAGE
STRUCTURE

The Reserve Bank of Fiji today announced the commencement of the public awareness campaign for the nation’s new coinage structure as endorsed by Cabinet in March this year.

In making the announcement Deputy Governor, Mr Sada Reddy, said that Cabinet, on 13 March 2008, approved a new coinage structure for Fiji as follows:
  • Withdrawal from circulation of the 1 cent coins in addition to the earlier approval to withdraw the 2 cents from circulation when stocks run out; and
  • Introduction of smaller and lighter 5, 10, 20, 50 cent and $1 coins with new metal composition and edge designs to replace the current circulation coins.

Since March 2008, the Bank had been working closely with the successful tenderer, the Royal Canadian Mint, to finalise production.

Mr Reddy explained that the changes were necessary in order to take advantage of new technologies in minting coins; achieve cost savings due to rising cost of metals by reexamining the metal composition and the size of our coins, and in doing so aligning the size and weight to value; and taking into account public views and ensure Fiji’s coinage meets the needs of the general public. Implementation of these changes will save the country millions of dollars.

The newer smaller and lighter coins will be issued in January 2009 and further details will be released progressively by the Bank in the near future.

Mr Reddy also informed that effective from 13 October 2008 the Reserve Bank will commence withdrawing the 1 and 2 cent coins from circulation. He went on to say that over the past few weeks the Bank has engaged key stakeholders in discussions to ensure that critical issues stemming from the cessation are addressed particularly the issue of rounding to the nearest 5 cents.

Mr Reddy clarified that the marked prices should not change and that the rounding will only occur at point of sale and for cash transactions only.

Mr Reddy said that it is important that the public realize that current prices should not be affected by this change. The Reserve Bank will issue guidelines on the rounding as agreed with the Prices & Incomes Board to apply for price controlled items. The Reserve Bank is encouraging all traders to use the same rounding methodology for non-price controlled items and they hope competitive forces will keep this in check. The Reserve Bank acknowledges that the major concern is for rural areas and the Bank is committed to ensuring that awareness filters down effectively to these areas.

Reserve Bank of Fiji

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Monday, September 08, 2008

Reserve Bank relaxes policy on payments for imports

The Reserve Bank of Fiji announced some relaxations on its policy on prepayments for imports of F$50,000.00 and over, with effect from Monday, 8 September, 2008.

Importers can make payments directly through their commercial bank or authorised dealer, without prior approval from the Reserve Bank.

With these changes the Governor, Savenaca Narube, explains that the gradual recovery in the economy and a more positive outlook has allowed the Reserve Bank to gradually relax policies.

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