THE Governor of the Reserve Bank of Fiji, Savenaca Narube has expressed grave concern for the state of our economy.
And he warned that in the face of dwindling foreign reserves, tourism arrivals, remittances and exports, our only option would be to borrow offshore.
"I am very worried about the economy and the impact of the global recession on us," Mr Narube said in an interview yesterday. "Foreign reserves is earned from our tourism, remittances, exports and investment here, so we would like to encourage that - more investments, more tourism, more remittances, more exports.
"Those kind of efforts are being made and they will take time to take results.
"That is not happening, we need to borrow money.
"What we need to do is look at all the options to support our foreign reserves and government in its operations can borrow locally or overseas."
Mr Narube said the Government borrows funds annually, naming the Asian Development Bank and the World Bank as possible lending institutions.
He added that the Government has not reached its maximum level of borrowing and that "we still have cushion to borrow offshore".
"You can only borrow too much, up to a certain level before your capacity to repay is exceeded. We haven't reached that level.
"We need to have short-term solutions for long-term solutions. We need to do what we need to economically to boost our exports, need to do a lot to make that happen such as promoting tourism and helping our sugar industry," Mr Narube said.
He, however, refused to be drawn to comment on where we would borrow from if the Government does not give in to international pressure on holding elections before the end of year and gets international suspension.
"You ask the government that," Mr Narube said.
The RBF is also revising the growth forecast for the year with Mr Narube saying it would be lower than the 2.4 per cent previously announced. Finance permanent secretary Peceli Vocea declined to comment when approached for his views.
