Subscribe to Fiji Sale - Lists Properties on Mortgagee Sale in Fiji
Powered by groups.yahoo.com

This blog is brought to you by Gilbert & Samuels Company Limited, a financial advisory services and consulting company based in Suva, Fiji.
To contact the authors of this blog, please call telephones (679) 3342719, (679) 3544897 or e-mail info@gilbert.com.fj.


Wednesday, April 15, 2009

Fiji Dollar Devalued

The Reserve Bank of Fiji has devalued the Fiji Dollar by 20%. The devaluation takes immediate effect today, 15 April 2009.

The devaluation has been done to contain Fiji's falling foreign reserves as well as the impact of recent developments on the economy. Additionally, further restrictions on exchange controls have been put in place.

In simple terms, the devaluation would mean that more Fiji dollars are needed to purchase imports and exporters get more Fiji dollars when they export goods and services. This makes imports more expensive while exporters earn more local currency.

Devaluations are meant to discourage imports and to encourage exports, a reason for which is to assist maintain or boost our country's foreign reserves.

Given that things in or from Fiji will be cheaper to overseas buyers, it should help encourage more purchases of our goods and services from foreign buyers, including tourism.

However, for locals, cost of living would be expected to rise in the short/medium term as a direct result of the devaluation as prices of goods, particularly imported ones, rise. One outcome of this may see people putting pressure on employers to raise their salaries. However, raising salaries and wages would be a real challenge for employers given the current state of the economy, its performance, and the high costs of doing business.

PS : Note our post on the impact of the new ceiling on lending rates which were announced today by the Reserve Bank of Fiji.

For investment and business advice, please call our office on (679) 3342719 or email info@gilbert.com.fj.

Labels: , , , , ,

0 Comments:

Post a Comment

<< Home