By RACHNA LAL
The Reserve Bank of Fiji noted a record annual commercial bank lending growth of 13.7 per cent in May.
This has been mainly attributed to the accommodative monetary stance adopted by the Reserve Bank.
Governor of the Reserve Bank, Barry Whiteside, said this growth in bank lending was the highest since March 2007.
“It has been supported by record low interest rates and Government initiatives announced in the last two National Budgets,” he said.
Therefore the central bank has decided to keep the Overnight Policy Rate unchanged at 0.5 per cent.
Mr Whiteside said at this stage, the current accommodative stance of monetary policy remains appropriate to support domestic economic activity.
“The strong growth in credit is not a concern at this stage as most of it is directed to the productive sectors such as manufacturing, building and construction, real estate, wholesale and retail trade and utilities,” he said.
Sectoral performance
Mr Whiteside said while our traditional exports such as sugar and gold were performing below their historical highs, foreign reserves remain comfortable.
He said this was supported by strong tourism earnings and inward remittances.
“Remittances grew by 24.7 per cent during the first five months of 2013 over the same period last year,” he said.
“After a slowdown in visitor arrivals in the first three months because of the impact of Cyclone Evan, outbound short-term departures from Australia and New Zealand for Fiji in April were 30 per cent higher over the year.
“As at 26 June 2013, foreign reserves were around $1.684 billion, sufficient to cover 4.8 months of retained imports.