The unprecedented developments in the global financial markets in recent weeks may affect to some extent the demand for our exports and services, including tourism.

While responding to concerns raised by the business community, Reserve Bank of Fiji Deputy Governor Sada Reddy said the financial market problems which began in the US spread rapidly to other economies including Europe, Asia, South America including Australia and New Zealand.

He stressed that the global crisis is still unfolding and it is difficult to forecast what the exact impact of these developments will be on small island countries like Fiji, however it is quite probable that the global economy slow down may affect demand for our exports and services.

However, Reddy said there are some positive developments as well, in terms of the fall in the oil prices which will mean lower fuel prices in coming months and this in turn may slowdown the high inflation rate we have experienced so far this year.

On any possible impact on Fiji's financial system, Reddy said Fiji's banks are to a large extent, insulated from the global financial markets and therefore the RBF does not expect any major issues for out banks and insurance companies.

The RBF Governor said the parents of Fiji's banks are well capitalized and stable based on information from regulators of the parent bodies of the branch bank operations.