Fiji has made a strong recovery in the foreign reserves.

The Governor of the Reserve Bank of Fiji Sada Reddy said foreign reserves reached $700 million as of this Wednesday which compares to $441million before the devaluation in April.

Reddy said this indicates that the policies put in place in mid-April are proving to be very effective in turning the reserve levels around.

However he said it does not mean that everything is alright.

Reddy said the impact of the global crisis is still being felt and will continue to do so for the next couple of years which is why policies will remain tight in the future.

Reddy said with the increase in foreign reserves, the banking system liquidity also rose strongly to reach levels of around $200 million after it reached extremely low levels earlier this year.

He said this liquidity will now allow for further reduction in lending rates and more availability of credit.