1 Nov 2005

Reserve Bank of Fiji ups interest rate by half a per cent

11:10 am on 1 November 2005

The Reserve Bank of Fiji has raised the official interest rate by a half a percentage point from 1.75 per cent to 2.25 per cent.

A statement from the Reserve Bank says its board has noted that the prevailing economic conditions have not changed since the last rate rise in May last year.

The Reserve Bank governor, Savenaca Narube, says economic indicators reveal consumption is still strong, credit remains bouyant and imports are rising, but exports are under-performing.

Mr Narube says the rapid rise in mortgage lending as house prices escalate is becoming a concern, given the possible strains on debt servicing capacity.

He says the bank had earlier kept interest rates low but Fiji is now faced with the impact of higher international oil prices which would raise domestic inflation.

Mr Narube says the higher oil prices are raising Fiji's import bill further at a time when exports are not performing well.