The decision to merge the Capital Markets Development Authority operations into the Reserve Bank of Fiji is expected to see more than 50 percent reduction in operating costs of the CMDA.

Prime Minister, Commodore Voreqe Bainimarama announced last week that from the 13th of this month, the administration of Capital Markets Development Authority Act has been transferred to the RBF.

The CMDA was established in 1996 and commenced operations in 1998. The RBF said it was hoped that the capital markets would grow sufficiently so that the industry would be able to support bulk of the operating costs of CMDA.

However the Reserve Bank said this has not happened and the cost of operations kept on escalating and was expected to reach almost 1.6 million dollars by 2010. The total operating and capital expenditure was expected to increase by 95 percent this year to 1.3 million dollars.

It said this type of cost escalation was difficult to sustain.

The RBF said with the tight financial position of the government and the need to maintain low transaction costs for the financial intermediaries in the capital markets, it became necessary to make a major change in the operations of the CMDA.

In the interim, the CMDA will continue to function normally but report to the RBF Governor. Wati Seeto has been appointed Officer-incharge in the interim until a final move of staff to RBF takes place by the end of October.