Your Window To Fiji And Beyond.

Illustration of Liquidity at $2.4billion

Fiji’s Banking Boom: Surplus Funds Fuel Low Lending Rates

Spread the love

Fiji’s banking sector is currently enjoying a significant liquidity surplus of $2.4 billion, as highlighted in the latest economic review by the Reserve Bank of Fiji (RBF). This robust liquidity has been instrumental in maintaining historically low lending rates, recorded at 4.59% for loans and 1.67% for time deposits as of November 2024. The RBF notes that such financial conditions are favorable for continued economic growth.

In the past year, broad money supply experienced a remarkable increase of 8.4%, driven largely by a strong 11.4% rise in private sector credit. Lending to businesses grew by 10.9% while household credit surged impressively by 13.3%, reflecting a positive sentiment in economic activity. Notable indicators of this robust consumption environment included an 18.4% rise in vehicle registrations and a substantial 33.8% growth in new consumption lending, mainly benefiting sectors such as wholesale, retail, hotels, and restaurants.

Despite these encouraging trends, challenges in the investment landscape are apparent. New lending for investment purposes saw a commendable increase of 25.9%, amounting to $883.6 million, primarily targeted towards building and construction projects. However, the overall number of building permits issued fell by 35.9%. On a positive note, the value of these permits rose dramatically by 97.7%, indicating rising costs driven by increased construction expenses and a shortage of skilled labor.

Overall, while investment activities face hurdles, the strong liquidity and positive lending trends portray a resilient economic framework for Fiji. With increasing private sector activity and consumption, there remains a hopeful outlook for sustainable economic growth moving forward. This optimistic sentiment is bolstered by the expectation that as challenges are addressed, Fiji can continue on a path towards a stronger economic future.

Latest News

Search the website