Commercial bank borrowing costs were lower 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 stated that financial conditions in the local market remained supportive of economic activity. Banking system liquidity was reported to be “ample” at $1.9 billion at the end of June, contributing to the outstanding lending rate reaching a historical low in May.
“The low interest rate environment is supporting lending activity as private sector credit grew 9.4 percent over the year in May,” noted the RBF.
Overall, interest rates showed mixed movements during the month. The lending rate fell to a historical low of 4.67 percent in May compared to 4.75 percent in February and 5.03 percent in May of the previous year. On the other hand, 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.
Furthermore, 12-month Government treasury bills were selling at 0.13 percent in May last year, increasing to 0.30 percent in April, and then to 0.93 percent in May, according to the RBF.