SUVA, October 29 (Xinhua) – Fiji’s banks are tightening their lending due to the current poor economic environment.
Bank lending in the island nation is tighter due to the current increased risk and poor economic environment, according to a statement by the Reserve Bank of Fiji (RBF) on Thursday.
RBF Governor Ariff Ali said that domestic economic activity was subdued in line with global developments according to the latest sub-indicators. Sectoral production and aggregate demand remain weak on an annual basis, reflecting the significant impact of the COVID-19 crisis on market demand and supply.
On the positive side, however, most domestic demand sub-indicators and some key sectoral results have continued to improve on a monthly basis following the easing of domestic COVID-19 lockdowns and restrictions.
According to the head of the central bank, headline inflation in Fiji was minus 3.2 percent in September, compared with minus 3.0 percent in August, and continues to be supported by lower prices for alcohol, yaqona, food and fuel. Going forward, inflation is expected to be negative by mid-2021, given the weak economic environment, cuts in taxes and duties, and lower international oil prices.
As of Wednesday, the island nation’s currency reserves were Fiji $ 2.3 billion (about $ 1.1 billion), enough to cover more than eight months of withheld imports and are expected to remain reasonable in the medium term.
The Fijian economy is expected to shrink 21.7 percent in 2020, largely due to poor tourism activity and its impact on the rest of the economy. End item
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