The Reserve Bank of Fiji has stressed that while foreign reserves have fallen due to the seasonal build up of stocks before Christmas and some one-off lumpy outflows, the reserves now remain adequate.

Acting Deputy Governor of the Reserve Bank, Barry Whiteside said the adequacy of foreign reserves is measured in how much imports these reserves can cover. Whiteside said the imports can include the imports of goods only, or they can also include the imports of services.

The Acting Deputy Governor said the appropriate measure for a country like Fiji is the imports of goods only because Fiji enjoys a surplus on the services account, largely as a result of tourism and remittance flows.

Whiteside also reveals that while foreign reserves are currently declining, the forecast is that imports in 2009 will also decline compared to the level last year.

He said at the end of January this year, the Reserve Bank reported that Fiji's official foreign reserves were provisionally estimated at 737.5 million dollars, equivalent to 3 months of imports of goods. Despite a reduction in the level of official reserves from December 2008, the import cover improved in January to 3 months. Whiteside said this is because we expect our import bill in 2009 to be lower than 2008, primarily due to falling international oil prices.

More importantly, Whiteside said the Reserve Bank has stated repeatedly over the last decade that the country should do all it can now to increase exports to ease the pressure on foreign reserves.