The Reserve Bank of Fiji said it recognizes that consistently implementing the right policy mix will be crucial in regaining stability and re-establishing a higher economic growth path for Fiji.

RBF Governor Savenaca Narube said the priority right now for macroeconomic policy is to stabilize our foreign reserves position.

He said the monetary policy will continue to focus on monitoring monetary and financial stability.

Narube said at the same time, there is capacity for government to support economic growth through capital spending.

In financing its expenditure, the RBF Board noted that there is room for government to switch to offshore borrowing in order to support monetary policy to safeguard foreign reserves.

Narube said government's external debt is only 7 percent of GDP and our external debt servicing is as low as 3 percent of our export earnings.

In response to the tightening of liquidity, the RBF Governor clarified that the Reserve Bank will stand ready to supply liquidity to allow the financial system to operate smoothly but without undermining the priority of safeguarding foreign reserves.

Narube said the Reserve Bank has already halved its minimum lending rate under which commercial banks can borrow from the RBF, from 6 to 3 percent.
 
The RBF is also urging commercial banks and the Fiji Development Bank to use the Export Finance Facility, under which they can borrow from the RBF at a maximum of 2 percent and lend at concessionary rates to eligible exporters.

To help in rebuilding after the flood, the RBF has also agreed to establish a Flood Rehabilitation Facility to be offered through commercial banks with concessional interest rates similar to the Export Finance Facility.