The Reserve Bank of Fiji cut its overnight policy rate by 100 basis points to 0.50% from 1.50% previously, in order to support economic growth in the context of an uncertain global outlook. Acting Chairman, Deo Saran, said: “The weaker outlook on global and domestic growth warrants such a move, particularly at this juncture where foreign reserves levels are comfortable and the outlook is stable, while inflation is expected to moderate over the coming months,”
The Reserve Bank of Fiji last reduced the OPR by 50 basis points to 2.00% during its April meeting this year. Fiji recorded an annual inflation rate of 9.7% in September, compared to 10.1% in July and 10.3% in June, while the Bank has previously forecast end-2011 inflation of 7.0 percent.
Fiji’s economy contracted -0.2% in 2010, but is forecast to rebound +2.7% this year and grow 2.1% in 2012. The Fijian dollar (FJD) has gained about 7% against the US dollar so far this year, while the USDFJD exchange rate last traded around 1.79
