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Lending doubles

Geraldine Panapasa
Saturday, January 12, 2013

NEW lending for consumption purposes more than doubled to $180.1million in the year to October 2012 while domestic value added tax collections noted a year-on-year growth of 16.2 per cent for the same period.

In its economic review for the month ending December last year, the central bank said partial indicators for consumption continued to suggest increased household and business spending within the economy.

"Consumption activity was also supported by the inflow of personal remittances and rose over the year by 6.4 per cent in September 2012," the Reserve Bank of Fiji said.

"Investment indicators remained upbeat while new lending for investment purposes rose year-on-year by 16.9 per cent cumulative to October.

"A growth of 7.6 per cent was also noted in domestic cement sales indicating a positive outlook for investment in the coming months.

"Financial conditions feature declining lending rates, a recovery in credit and buoyant liquidity levels."

RBF said commercial banks weighted average lending rate slid to 6.73 per cent in October from 6.84 per cent in the preceding month.

Private sector credit grew by 5.8 per cent on an annual basis in October after rising 3.3 per cent in the same period in 2011, RBF said.

"The annual growth in broad money slowed to 8.2 per cent in the same period underpinned by the general moderation in the growth rate of net foreign assets during the year," RBF said.

Meanwhile, foreign reserves were estimated around $1.636billion at the end of December 2012.

RBF said this was sufficient to cover 5.2 months of retained imports of goods and non-factor services. Over the month of November, RBF said liquidity rose by $20.8m to $554.8m.

It was around $578m at the end of last month.

RBF said inflation in November also declined to 2.1 per cent from 4.1 per cent in October last year.

"The decline over the month was attributed to the fall in international food and oil prices, weak global growth and lower domestic prices recorded for some food items, clothing and footwear," the central bank said.

Over the year, nearly all categories noted price increases, RBF said.





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