FIJI’S foreign reserves remain at comfortable levels now and are projected to remain stable in the medium term, says Finance Minister Professor Biman Prasad.
Speaking in Parliament, he said as of Wednesday, Fiji’s reserves position stood at around $3.2 billion.
This, he said, was sufficient to cover about five months of imports of goods and services.
“While these reserves are comfortable, the Reserve Bank is managing them prudently as we expect pressure on reserves in the coming months from higher oil prices and a slowdown in inward tourism receipts,” he said.
“The healthy reserves position has ensured that the liquidity in the financial system supports low interest rates, which is a key ingredient in driving private sector borrowing and investment.”
He said the financial system liquidity stood at $1.9b.
“On the fiscal side, the Government has decisively tackled our debt problem and introduced a number revenue reforms, although they are painful, to ensure long term debt sustainability.
“We have managed to bring down our debt to GDP ratio from almost 90 per cent in 2022 to below 80 per cent at the end of this fiscal year (July 2024). That is good progress, but we still have a long way to go. This path of fiscal discipline and debt reduction must continue.”
He said the VAT increase last year had some impact on prices of goods and services to the people.
However, he said if this bitter medicine was not taken now, the consequences would be far more severe and painful.
“The recently concluded International Monetary Fund (IMF) Article IV Mission has also echoed similar sentiments and agreed with the Government’s fiscal consolidation plans and commitment to debt reduction.”
