Fiji’s liquidity position stood at almost $2 billion at the end of 2021.
Acting Prime Minister and Economy Minister Aiyaz Sayed-Khaiyum said high foreign reserves – supported by the external government borrowings – helped increase liquidity.
He said these measures played a key role in supporting a low interest rate environment which was critical for economic recovery.
“Imagine major spikes in interest rate,” he said.
“We carefully navigated these headwinds and thankfully calmer seas now lie ahead.”
Mr Sayed-Khaiyum said at the end of 2021, foreign reserves stood at $3.2 billion, equivalent to 9.9 months of import cover.
“This is the first major crisis during which we have not had a balance of payments (foreign exchange) problem or a devaluation. We entered the crisis with strong foreign exchange holdings and managed to maintain a strong reserves position during the crisis.
“This is despite the closure of our largest foreign exchange earner, tourism, which brings in about $2 billion annually.
“That’s why Government also borrowed from external sources like ADB, World Bank, AIIB, JICA and sourced budget support grants from Australia and New Zealand.
“Had Government not borrowed externally there would have been a very high risk of a devaluation. Imagine a devaluation during this crisis.”
