28 Mar 2006

Fiji's Reserve Bank to take out tens of millions dollars

8:48 am on 28 March 2006

The Reserve Bank of Fiji is to take tens of millions of dollars out of the banking system to help stem a consumer spending blow-out.

The Fiji Times reports that according to the Reserve Bank, credit is growing faster than the economy and inflation, leading to an excessive rise in debt levels.

The latest measure will require commercial banks to raise their statutory minimum deposit with the Reserve Bank from 5 per cent to 7 per cent from May the 8th this year.

This means that the amount of money commercial banks will have to deposit with the Reserve Bank will rise by another 2 per cent of their total cash assets.

This will result in tens of millions of dollars effectively going out of circulation because it will not be available for lending.