Date: 16 December 2021
The Reserve Bank of Fiji (RBF) has today released its Financial Stability Review for 2021, containing an assessment of risks arising from developments in the global and domestic economy to its core mandate of maintaining financial stability.
The global economic recovery continues amid a resurging pandemic that poses unique policy challenges. For the last 18 months, the Fijian financial system has managed to remain operationally resilient in the face of one of the dimmest chapter of the nation’s health crisis, exacerbated by the most notable continued economic contraction in Fiji’s modern history.
Governor of the Reserve Bank of Fiji, Mr Ariff Ali, in releasing the Report highlighted that “the Fijian financial system remains strong despite the impact of COVID-19 on businesses, households and the economy at large. Together with fiscal and monetary policy support, the achievement of the target inoculation rates has led to the relaxation of some containment protocols, ensuring a rebound in mobility and an uptick in domestic economic activity, though far from pre-pandemic levels.”
Credit continues to be the major risk facing the banking industry at this time, noting the level of nonperforming loans and loans on repayment holidays, however the recent surge in confidence from the resumption of the tourism sector activity would complement the industry’s efforts in managing this risk.
Governor Ali further states that “the resumption of international travel and tourism to Fiji is expected to fuel a stronger economic recovery next year but with some downside risks. These include the possibility of a third wave of COVID-19, adverse weather events, rising international oil and food prices and tightening global financial conditions.”
The RBF will continue to closely monitor the performance of banks and other supervised entities during this challenging time, and if warranted, implement measures considered necessary to maintain the safety and soundness of the Fijian financial system.
The 2021 Financial Stability Review is available on the RBF website at www.rbf.gov.fj