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There is a probability that the ongoing US financial crisis will to some extent impact demand for Fiji’s exports and services, tourism included, says the Reserve Bank of Fiji.
Deputy governor Sada Reddy said the unprecedented turmoil in the US had spread rapidly to other economies including Australia, New Zealand, Europe, Asia and South America.
As for the impact it’ll have on small island countries like Fiji, he said it was difficult to forecast because the global financial crisis was still unfolding.
However, he said there were some positive developments in the fall of oil prices.
“This will mean lower fuel prices in coming months and this in turn may slow down the high inflation rate we have been experiencing so far this year,” Reddy said.
On any possible impact on Fiji’s financial system, he said: “Fiji’s banks are to a large extent insulated from the global financial markets and therefore, we do not expect any major issues for our banks and insurance companies”.
“The parents of Fiji’s banks are well capitalised and stable based on information from the regulators of the parents of our branch bank operations,” Reddy said.
In an earlier interview with FijiLive, chartered accounting firm Ernst & Young’s visiting Oceania Managing Partner James Millar said small developing countries, including Fiji were not expected to be affected by the financial crisis in the United States.
