FIJI'S RESERVE BANK MOVES TO FORCE DOWN INTEREST RATES

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SUVA, Fiji Islands (February 9, 2000 – Radio Australia)---The Reserve Bank of Fiji is allowing more money into the economy in a bid to force down the country's high retail lending rates.

The bank says its initiative, which has seen interest rates come down from an average of nine percent last year to the current average of 8.3 percent, was motivated largely by a sharply falling inflation rate, now running at deflationary levels.

A leading Suva business executive has questioned the effectiveness of the bank's move at a time when the money market is flush with funds.

Financier Padam Lala said interest rates are not likely to come down unless there is more competition in the banking industry.

Foreign banks in Fiji enjoy a high return on assets, estimated at 30 percent.

For additional reports from Radio Australia, go to PACIFIC ISLANDS REPORT News/Information Links: Radio/TV News/Radio Australia.

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