Increase in liquidity

THE country’s banking system liquidity rose to $470.8 million at the end of the first quarter, from a low of $371.1m in mid-January 2017.

This was reported in the Reserve Bank of Fiji’s Economic Review for April released last week.

Liquidity is a degree to which an asset or security can be bought or sold in the market without affecting the asset’s price and is characterised by a high level of trading activity.

Simply, liquidity refers to the ease at which assets can be converted to cash in order to make payments in a timely manner.

According to the central bank, liquidity increased further to $546.9m as at 24 April.

Total domestic credit, RBF stated, expanded by 9.1 per cent while loans to the private sector were 14.0 per cent higher than the same period in 2016.

Commercial banks’ outstanding interest rate spread remained unchanged at 2.63 per cent as both lending and time deposit rates increased by 6 basis points over the month, the review highlighted.

RBF added that broad money expanded by 2.8 per cent in March, although at a slower pace than a month earlier, led by a 9.2 per cent decline in net foreign assets and a slowdown in net domestic assets by 6.6 per cent.

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