26th May 09:39 PM
RBF Governor stresses that there is no link between liquidity and devaluation
By Vijay Narayan
Monday 11/03/2019
Governor of the Reserve Bank of Fiji Ariff Ali

Fiji has no bank liquidity or cash crisis.

The Governor of the Reserve Bank of Fiji, Ariff Ali has made it clear that there is more than 300 million dollars of liquidity available and it is sufficient at this stage.

Liquidity is the surplus money that the commercial banks have at the end of each day, earning no interest.

Ali says RBF is also making it clear that Fiji has enough cash in the stock to meet the demands of the public or the economy for the next 5 years or more, which clearly shows that there is no liquidity crisis.

He also says that the RBF could increase the level of liquidity tomorrow however this is not needed as the level is appropriate at this stage.

The RBF Governor also stresses that there is no link between liquidity and devaluation.

Ali says although there is a lot of talk on social media,   devaluation deals with foreign reserves and the reserves currently stands at a combined level of $2.5 billion which is a 1 billion dollars buffer compared to the International Monetary Fund benchmark.

Ali says this equates to 4 months of import cover of goods and services, and there is more than enough foreign reserves.

He says they will continue to have a healthy buffer in foreign reserves and this is forecast for the next 3 years.

Meanwhile Opposition Whip Lynda Tabuya had claimed in a press statement that there is a growing liquidity problem that could lead to an economic crisis in Fiji.

Opposition Whip Lynda Tabuya

Tabuya says that there is growing evidence that the liquidity problem is worsening with major banks slowing or even halting new loan applications. 

She then went on to say that low liquidity affects ordinary citizens because it can lead to inflation, higher interest rates, higher prices for goods and services, unemployment and in worse case situations, devaluation of our currency.

Tabuya says the top commercial banks in Fiji have slowed and in some cases halted or postponed new loans and property settlements  because they simply don’t have enough cash on hand to meet needs.

Ali stresses that the RBF’s independent assessment continues on a daily basis and there is no liquidity problem for Fiji and people should not spread misinformation or create fear.

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