2007 Revised Budget - Minister of Finance

07 Mar '07

3 min read

They also raise debt servicing charges and the cost of doing business. Interest rates are being driven upwards by the tight liquidity in the financial system. In order to ease the pressure on interest rate, the financial system needs to be supplied 8 of 28 with adequate liquidity.

This is the role of the Reserve Bank as the lender of the last resort. The Reserve Bank has given the assurance that adequate liquidity will be injected into the system when needed.

But understandably we can only bring interest rate down further if we can adequately support our foreign reserves by other measures. We will therefore share the burden of safeguarding our external financial position by the following measures:

• We will explore government borrowing from offshore rather than domestically in 2007 and 2008, thus easing financial liquidity in the local market.
• We will examine raising the minimum requirement of foreign exchange that foreign investors bring when setting up businesses in Fiji.
• We will examine the requirement that the rate of corporate taxes be linked to retention of profits in Fiji.
• We will tighten the leakages of export earnings out of Fiji.

Fiji Government

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