Commercial bank borrowings were more affordable in May as lending rates hit a new low, according to data from the Reserve Bank of Fiji (RBF).
In its June Economic Review, released last week, the RBF reported that financial conditions in the local market remained conducive to economic activity. Banking system liquidity was substantial at $1.9 billion at the end of June, contributing to a new historical low in the outstanding lending rate in May.
“The low interest rate environment is supporting lending activity as private sector credit grew 9.4 percent over the year in May,” the RBF noted.
Overall, interest rates (monthly weighted average) showed mixed trends during the month. The lending rate dropped to its historical low of 4.67 percent in May, compared to 4.75 percent in February this year and 5.03 percent in May last year. Conversely, savings deposit rates decreased to 0.31 percent from 0.43 percent in April, 0.44 percent in February, and 0.41 percent in May last year.
Time deposit rates saw an improvement, rising from 1.11 percent in May last year to 1.62 percent in May this year.
Additionally, 12-month Government treasury bills were selling at 0.13 percent in May last year, 0.30 percent in April, and 0.93 percent in May, according to the RBF.