The Reserve Bank has increase the Statutory Reserve deposit to all commercial banks from 5% to 7% effective from today.
Reserve Bank Governor Sada Reddy said all banks are required under Section 40 of the Reserve Bank Act to hold a proportion of their deposits and similar liabilities with the Reserve Bank.
He said that there has been a significant build up in system liquidity since April 2009, and the amount of liquidity in the banking system has been on an upward trend, rising significantly in the Septmember quarter by around $170 million to around $350 million from levels of below $30 million in early April.
Reddy said the SRD is expected to supplement recent measures taken by the Ban to ensure that liquidity in the banking system is maintained at an acceptable level while safeguarding Fiji's foreign reserves.
He adds the bank liquidity expected to remain above $200 million and this should not put any upward pressure on interest rates.
Reserve bank increases SRD levels
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