Nauru's President, Ludwig Scotty, has dissolved Parliament and ordered new elections after MPs failed to pass the budget.
The President has also declared a state of emergency to allow the Government to continue to operate.
Foreign Minister David Adeang says fresh elections will be held on October 23rd.
Mr Adeang blames the Speaker of the House, Russel Kun, for the stalemate in parliament which prompted the dissolution.
"the government was not allowed by the Speaker yesterday to transact any business, and the first priority of business yesterday was to table and hopefully pass the national budget. Because we couldn't do that, because the Speaker wouldn't allow it, we were left with no option but to declare a national state of emergency for economy reasons."
David Adeang says the President's decisions are within with economic and security emergency laws under Nauru's constitution.
