The Asian Development Bank (ADB) is set to enhance financial opportunities for the private sector in Fiji by issuing bonds denominated in Fijian dollars. Emma Veve, the ADB’s newly appointed Director General for the Pacific Department, emphasized that this initiative aims to mitigate foreign exchange risks traditionally associated with lending in international currencies such as the US dollar. This move is significant as Fiji and Tonga will be the first countries in the Pacific to issue local currency bonds, aligning with broader efforts to deepen financial markets in the region.
During a recent meeting in Milan, Italy, Deputy Prime Minister and Minister of Finance, Professor Biman Prasad, reiterated the Fijian Government’s support for this venture. He highlighted that access to financing in local currencies can facilitate private sector projects that may not align with conventional commercial lending criteria, thus unlocking further investments critical for economic development.
Veve pointed out that the ADB is well-equipped to handle the foreign exchange risks involved, given its capacity to operate in multiple currencies. The bond issuance is designed to generate local currency resources while reducing foreign exchange volatility for domestic borrowers, thereby encouraging greater investments and contributing to sustainable economic growth in Fiji.
This initiative coincides with prior significant discussions within the ADB about enhancing financial mechanisms in the Pacific. Similar priorities were expressed regarding the issuance of bonds in local currencies, with Vanuatu and Samoa also showing interest in adopting similar strategies. The overall goal is to create a more resilient financial environment that supports small and medium enterprises (SMEs) and fosters sustainable development across the region.
As Fiji moves towards implementing this local currency bond initiative, it holds the promise of not only bolstering financial access for businesses but also enhancing fiscal resilience, ultimately leading to more robust economic growth. The collaboration with ADB underscores a positive trajectory for Fiji’s economy, creating hope for a future infused with increased investment opportunities and financial stability.
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