RBF Governor shouldn’t mislead the nation
Updated: Aug 22, 2019
April 16th 2019
The National Federation Party says the Governor of the Reserve Bank of Fiji must realise that the Fiji First government’s reckless and unsustainable spending is ruining real economic growth as evidenced by several factors instead of politicising the issue.
NFP Leader Professor Biman Prasad says recent remarks made by the Governor of the Reserve Bank of Fiji in defence of liquidity levels and economic growth are misleading and far from the reality.
“The RBF Governor is reported to have told both an economics workshop at University of the South Pacific last Friday and the Fiji Chamber of Commerce economic summit on Monday that there was no liquidity crisis”.
“The Governor said RBF had the authority to reduce its statutory deposits to zero (0) percent to allow liquidity to jump from the current level of $347 million to $1 billion if the need arises”.
“This is a highly irresponsible and illogical statement, similar to the Governor’s earlier statement of last month that there was enough money on RBF vaults to last for 5 years”.
“The Governor’s loose political talk is camouflaging the reality. He knows that his statements in defence of liquidity and the economy are illusory”.
“And he knows that the truth is that commercial banks are offering interest rates of as high as 6% to attract term deposits to boost liquidity levels. He also knows that because of this reason, commercial banks have increased lending rates”.
“The RBF Governor knows that it is impractical to reduce the requirement for statutory deposits to zero percent. It is a ridiculous proposition. Any financial institution, most importantly commercial banks are statutorily required to maintain a certain level of deposits”.
“The Reserve Bank of Fiji’s Economic Review for February 2019 paints a bleak picture of lack of growth in key economic sectors. Therefore, instead of realistic growth, the economy is consumption-driven and not leading to sustained and real growth”.
“The RBF Governor must know that he has put himself under the spotlight for being economical with the truth. Despite saying key economic sectors that generate real growth have declined, both the RBF and Government continue to forecast positive economic outlook”.
“This raises questions yet again about RBF’s independence and impartiality”.
“The RBF Governor is obviously parroting a political view despite the harsh reality staring directly at us”.
“The RBF Governor should maintain neutrality and independence of his office and refrain from parroting government’s political position on the state of our economy. Right now, we seem to be going through a crisis of confidence in the country”.
“What we need is more confidence building measures in all sectors of our economy and this can only be done by a properly constituted economic summit to address some of the fundamental concerns that the business community and indeed the general population has”.
Hon. Prof. Biman Prasad
Leader – National Federation Party