Show restraint, RBF tells trade unions

June 19, 2009 05:53:50 PM

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Fiji’s central bank has called on trade unions in the country to show restraint in wage negotiations in the next two years, to assist in what it has described as a gradual improving economy.

RBF governor Sada Reddy made this call in a statement today in light of improvements and challenges forecast to be experienced in Fiji following the imposition of some of the major monetary policies earmarked to stabilise the local economy in future.

These monetary changes, including the recent 20 per cent devaluation, will remain unchanged as decided by the RBF’s board meeting last month.

Reddy said the impact of the policy changes, imposed in line with the bank’s efforts to maintain financial and external stability, had been immediate.

The devaluation being a key proactive policy response, Reddy said was imposed to safeguard Fiji’s competitiveness and foreign reserves.

He said foreign reserves improved to around $650 million and “steadily increasing since”.

Liquidity in the banking system, he added also improved and rose to around $150 million from low levels early in the year.

“Following the devaluation, prices have increased as expected. Prices rose by 0.8 per cent in May due to higher prices for food, durable household goods and transport. During the coming months, prices are forecast to rise further and then start moderating towards the end of next year,” Reddy said.

In light of this, he emphasised the need for people to be self sufficient as much as possible in terms of food supplies, etcetera.

Reddy said the RBF has also called on the wider business community to “not to pass on the full effect of the price increases of the devaluation thus assisting in the economic recovery”.