.gif)
The Reserve Bank of Fiji (RBF) transferred a total of $39.2 million to government coffers in 2009, the central bank revealed in its annual report for 2009.
The report said the amount comprised the central bank’s entire profit of $16.6 million in the financial year ended 2009 and one fifth of the balance of the Revaluation Reserve Account of $22.6 million.
The report said that Fiji’s economy was estimated to have contracted by 2.2 percent last year.
Prime Minister and Minister for Finance, Commodore Josaia Voreqe Bainimarama tabled the annual report in Cabinet on 16 August, 2010.
The report includes the audited accounts and the operations of the RBF for the year ended 31 December 2009.
RBF Governor and chairman of the RBF board Sada Reddy said the first four months of 2009 saw Fiji going through a particularly tough period economically, as foreign reserves fell sharply to a low of $430 million and liquidity plunged to below $20 million.
“Difficult monetary policy decisions had to be taken to correct the situation, including the 20 percent devaluation of the Fiji dollar on 15 April 2009,” Reddy said.
“The policy actions, together with the International Monetary Fund’s Special Drawing Rights allocation program to all members, helped turn the slide in foreign reserves around through the second half of the year to a comfortable level of $1,091 million by end December.”
Reddy said foreign reserves continue to perform well and are currently around $1,160 million, worth around 3.7 months of imports of goods and non-factor services.
He said that although inflation rose from the effects of the devaluation, the 6.8 percent inflation recorded in December was well within initial expectations. As anticipated, inflation peaked in April 2010 at 10.5 percent and eased recently to 5.4 percent in July. It is now expected that inflation will be around 5 percent.
Reddy said that Fiji’s economy contracted in 2009 mainly from the impact of the global financial crisis on the domestic economy and natural disasters, which included major flooding and a cyclone.
“Our economy is now on a recovery path and will be assisted by measures announced in government’s recently revised 2010 national Budget.
“Appropriate monetary policies will also be in place to support the economic recovery.
“The lifting of various controls imposed last year and recent introduction of a new monetary policy framework will assist in this regard.”
Said Reddy: “Despite recent favorable economic indicators and the welcome turnaround in the global economy, there is still a need to be vigilant. We will continue to work closely with the government to ensure that appropriate monetary and fiscal policies are put in place to ensure a smooth recovery process.”
Source: Reserve Bank of Fiji
