Banks in Fiji tighten up on loans due to poor economic environment

Source: Xinhua| 2020-10-29 19:45:18|Editor: huaxia

SUVA, Oct. 29 (Xinhua) -- Banks in Fiji are tightening up on loans due to the existing poor economic environment.

According to a statement by the Reserve Bank of Fiji (RBF) on Thursday, banks in the island nation are more stringent with their loans because of the current elevated risk levels and depressed economic environment.

The RBF Governor Ariff Ali said that in line with global developments, domestic economic activity was subdued as per the latest partial indicators. Sectoral output and aggregate demand remain weak on an annual basis reflecting the substantial impact from the COVID-19 crisis on market demand and supply.

However, on the upside, most partial indicators of domestic demand and several key sectoral outcomes have improved consistently on a monthly basis following the easing of domestic COVID-19 lockdown and restrictions.

According to the central bank chief, Fiji's headline inflation stood at negative 3.2 percent in September, compared to negative 3.0 percent in August, and continues to be underpinned by lower prices for alcohol, yaqona, food and fuel. Looking ahead, inflation is envisaged to be in negative territory until mid-2021 considering the weak economic environment, reduced taxes and duties and lower international oil prices.

On Wednesday, the island nation's foreign reserves stood at 2.3 billion Fijian dollars (about 1.1 billion U.S. dollars), sufficient to cover more than eight months of retained imports, and are expected to remain adequate in the medium term.

The Fijian economy is expected to contract by 21.7 percent in 2020 mainly due to poor tourism activity and its knock-on effects on the rest of the economy. Enditem