Fiji’s foreign reserves stood at $3.7billion in December last year, enough to cover half a year’s worth of retained imports and supporting a liquidity of $2.4b in the banking system.
Since the COVID-19 pandemic, the Reserve Bank of Fiji (RBF) has maintained the overnight policy rate at 0.25 percent, which is said to be a very accommodative monetary policy stance as the twin objectives remained in focus – maintenance of sustainable foreign reserves and ensuring price stability.
Westpac Fiji senior economist Shamal Chand said the year 2024 noted a healthy credit growth in double digits, where total commercial bank outstanding loans rose by 13.1 percent in the year to November (2024) to a value of $9.5b.
He said the largest contributors to the total outstanding loans last year came from lending to wholesale, retail, hotel and restaurants – contributing 4.0 percent towards the 13.1 percent total growth.
“This follows lending to private individuals, real estate, business and construction and manufacturing sectors, which contributed the most,” Mr Chand said in Westpac Fiji’s quarterly economic update released Tuesday.
“Further, private sector credit growth has ticked 11.4 percent upwards in 2024 leading broad money to grow by 8.4 percent.”
Domestic yields, Mr Chand said had picked up slightly for treasury bills as the Government’s new fiscal year kicked in in August.
“Yields have been relatively flat since late 2021, at historic lows, having dropped significantly during the pandemic-era as external borrowings funded the Government’s fiscal deficit, reducing the need to seek domestic borrowings.
“Yields for three-month bills have risen from 0.10 to 0.15 percent and six-month bill yields rose from 0.35 to 0.40 percent in October 2024.
“As the new fiscal year started in August 2024, yields for 12-month bills rose from 0.93 to 1.14 percent.
“Bonds of 20-year tenure have also seen some action, as yields rose to 5.0 percent from prior 4.98 percent.”
In its December 2024 economic review, the RBF said foreign reserves were projected to remain comfortable over the medium term.
