FIJI BANK OFFICIAL WON’T DEVALUATE DOLLAR

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SUVA, Fiji (Fijilive, July 5) – Fiji's Reserve Bank governor Savenaca Narube has again reassured the nation that the central bank is not considering a devaluation of the Fiji dollar.

Narube made the comment at the LICI (Life Insurance Corporation of India) Fiji's launch of their New Bula Gold product last night.

He was reacting to suggestions by Australian academic Dr Satish Chand that a devaluation was inevitable considering the state of the economy.

"Let me add that the bank is not considering any devaluation of the currency," Narube stated.

Chand had said that the Fiji dollar was overvalued by as much as 12 per cent.

He said the RBF should take some blame for the current situation, which could only be rectified through a devaluation of the Fiji dollar.

Chand said that while devaluation would result in inflation spike, "Fiji does not have much of a choice".

"These are the pains that have to be taken as a result of the contraction of the economy."

Chand also said that the RBF could have acted earlier and has to take some responsibility for their inaction of the past.

"Unless we suddenly have a change in investor confidence, unless we have huge inflows of capital, unless that happens, I think a continual decline of foreign reserves will force the Reserve Bank of Fiji (RBF) to devalue the currency," he said.

"The longer that the Reserve Bank holds out, the bigger the hit it will have to take," he said.

But Narube says foreign reserves have stablised.

"This implies that our policies are working to slow down consumption."

But he noted that it could also be the result of the economic downturn and the delay in major investment projects which have sizeable import contents.

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