11 Jun 2009

Samoa banks gear up for road switch impact

2:18 pm on 11 June 2009

Banks in Samoa are bracing for the financial impact of the switch to driving on the other side of the road in September given a steady decline in remittances.

The Central Bank Governor, Leasi Papali'i Tommy Scanlan, says this and the impact of the global recession and rising unemployment in Samoa are worrying.

He says banks are gearing up for more people to import vehicles closer to the roadside switch, with many utilising cash remittances to pay for it.

"What we are doing at the Reserve Bank and the Central Bank is making sure there's a healthy level of reserves there so that by the time closer to the date of when it's going to change over and people decide to import more vehicles there's a cushion there to pay for the vehicles and reduce any adverse impact on the Balance of Payments position of the country."

Governor of Samoa's Central Bank, Leasi Papali'i Tommy Scanlan

The road switch change is set for September under a policy which the Prime Minister says allows for more families to own vehicles provided by relatives in New Zealand and Australia.