Fiji holds rate, comfortable outlook for inflation, reserves

    Fiji's central bank kept its Overnight Policy Rate (OPR) steady at 0.5 percent, saying the current accommodative policy stance remains appropriate to support domestic growth given the "comfortable outlook for foreign reserves and inflation."
    The Reserve Bank of Fiji, which has maintained its rate since December 2011, said Fiji's economy had shown great resilience so far and was forecast to expand by 3.2 percent this year on the back of strong domestic consumption and investment.
    Earlier this month, the central bank revised upward its 2013 growth forecast to 3.2 percent from 2.7 percent in the national budget, compared with 2012's estimated 2.2 percent growth. If the forecast rate is achieved, it will be the strongest growth rate since 2004.
    Growth in 2014 and 2015 is forecast at 2.5 percent and 2.4 percent, respectively.
    The central bank's mid-year survey showed improvements in business and investor confidence and indicates continued robust economic activity well into next year while the financial system remains "awash with liquidity" and lending rates are low, providing further impetus for economic activity.
    The central bank noted that its twin objectives remained intact, with July's inflation rate rising to 1.9 percent in July from 1.5 percent in June, and foreign reserves of around $1.834 billion, sufficient for 5.1 months of imports.
   
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