Deputy Prime Minister and Finance Minister Professor Biman Prasad presented the Reserve Bank of Fiji’s Annual Report for the financial year spanning from August 2023 to July 2024, in Parliament this week. The document outlines the bank’s audited accounts and operations for the fiscal year ending July 31, 2024.
Governor Ariff Ali remarked that the report underscores the Reserve Bank’s commitment to fulfilling its mandates while supporting the Fijian economy through various challenges and unforeseen economic shifts. He noted a significant increase in inflation during the fiscal year, which averaged 4.8% compared to 2.7% in the prior year. Nevertheless, the country’s foreign reserves remained robust at about $3.6 billion, covering approximately 5.8 months of retained imports as of July 2024.
Looking ahead, the economy is expected to grow by 3.8% in 2024, following an impressive 7.5% growth in 2023. This growth is primarily driven by a resurgence in the services sector, notably buoyed by an unexpected increase in visitor arrivals.
Professor Prasad emphasized the resilience of the Fijian economy in the face of global uncertainties, including slowing growth, inflationary pressures, supply chain disruptions, and geopolitical tensions. He highlighted the tourism industry as a critical factor in Fiji’s post-pandemic recovery, with a 6.5% rise in visitor arrivals in the first ten months of 2024 compared to the same period last year.
The banking sector has remained stable and competitive throughout the fiscal year, characterized by strong capital positions and a decline in non-performing loans, which facilitated heightened private-sector credit. As a result, the Reserve Bank did not implement additional loans under its Disaster Rehabilitation & Containment Facility and Import Substitution and Export Finance Facility.
Governor Ali pointed out that capital controls had been gradually relaxed due to favorable foreign reserve levels, allowing for increased delegated limits on capital transactions and certain payments starting in June 2024. He also commended the insurance industry’s resilience, marked by a solid solvency surplus and satisfactory earnings.
The Fiji National Provident Fund met its solvency requirements, while capital markets experienced growth in market capitalization and funds under management by Managed Investment Schemes. The report also emphasizes the Reserve Bank’s ongoing commitment to innovation and modernization within Fiji’s financial system.
A notable achievement in the fiscal year was the advancement of the digital transformation of the country’s payment system. Phase two of the National Payment System’s automated clearing house was launched in November 2023, allowing for instantaneous interbank transactions. Phase three, which involves integrating Fiji’s mobile network operators for payment interoperability, is currently underway.
Furthermore, the Reserve Bank launched the “Natadola Roadmap to Inclusive Green Finance” in June 2024, collaborating with other central banks in the Pacific to promote green financial inclusion in vulnerable island nations. Additionally, a partnership was formed with various government ministries and private sector entities to sign the Women in Finance (We-Fi) Code in March 2024, aimed at enhancing support for women-led micro, small, and medium enterprises (MSMEs).
Throughout the year, the Bank celebrated its 50 years of central banking, which served as a moment for reflection on its historical journey and achievements. The RBF also finalized a strategic plan for the next five years, completing a thorough review of its core statements and acknowledging the contributions of its Board, management, staff, and stakeholders.
This report illustrates a strong commitment to economic growth and stability in Fiji, as well as innovation aimed at ensuring a brighter and more inclusive financial future for all citizens.
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