FIJI FLOATS $150 MILLION OVERSEAS BONDS

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WELLINGTON, New Zealand (Radio New Zealand International, Sept. 13) – For the first time ever Fiji is borrowing overseas to raise its dwindling foreign reserves.

Radio Fiji reports that Fiji has issued bonds worth US$150 million on the international market.

The radio quotes economist Dr Mahendra Reddy as saying this is a giant leap for a small island country whose domestic economy is struggling with supply constraints.

[PIR editor’s note: According to separate RNZI story published today, international credit rating agency, Standard and Poor’s, has rated Fiji’s US$150-million bond placement on the international debt market at BB MINUS. Standard and Poor’s says the rating reflects Fiji’s narrowly based economy and persistent fiscal and current account deficits. Its credit analyst, Kyran Curry, is quoted as saying Fiji’s fiscal performance is weak partly as a result of the government’s deliberately expansionary fiscal policies to boost growth after the coup.]

Dr Reddy says while this sum of money can be raised within the country, the government has gone overseas in order to raise foreign reserves.

The reserves are now sufficient to pay for only 2.6 months of imports compared to about 5 to 6 months worth in the past.

Dr Reddy says this is a matter of concern and the overseas bonds are a measure to deal with a critical situation.

He says the matter that needs to be addressed is why Fiji is not able to raise its exports.

September 14, 2006

Radio New Zealand International: www.rnzi.com

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