22 MAY 2000 SUVA (Pacnews) - Fiji's Reserve Bank today (Mon, May 22)
announced a number of policy measures to protect foreign exchange
reserves during the current political crisis.
The Bank said it had tightened capital controls across a variety of
transactions as local businesses scrambled to transfer large amount of
funds into foreign bank accounts because of the economic upheaval
expected as a result of the hostage crisis in Parliament.
"Transaction limits have been reduced in several categories,
documentary requirements have been increased, and some delegations to
commercial banks to approve certain foreign exchange transactions have
been rescinded," a statement from the Bank said.
The Bank said it had imposed a credit ceiling on individual banks.
"From today, bank's loans and advances to the private sector are
required to be held at or below levels prevailing on May 19 2000.
Banks will have to manage their lending within this overall
constraint," the statement said.
"The interest rates charged to banks that use Reserve Bank lending
facilities have been increase substantially. The Minimum Lending Rate
has been increased to 15 per cent, effective immediately. The
repurchase and re-discount rates have also been increased to similar
levels. The high rates should discourage banks from unnecessarily
accessing funds from the Reserve Bank."
The Bank said it has also increased its policy indicator target
interest rate to 5 per cent.
"The increase will bring policy interest rates in Fiji to around
levels of our trading partners. The increase in interest rates should
ensure that savings rates in Fiji are competitive and help prevent
excessive borrowing, particularly for short-term speculative
purposes."
The Bank emphasised that the policy changes are a result of recent
political instability and the need to ensure that Fiji's foreign
exchange reserves are protected. The Bank noted that Fiji's foreign
exchange reserves are currently over FJ$800 million (US$387.5
million), "well in excess of the amount required for usual operations
and sufficient to provide a substantial buffer in the event of any
temporary pick-up in capital outflows".
"However, the strong measures have been needed to ensure that reserves
are maintained during the present crisis. The measures will be
reviewed regularly and it is hoped that some relaxation will be
possible once the political situation normalises and financial
pressures abate....PNS (ENDS)
22 MAY 2000 SUVA (Pacnews) - Fiji' President Ratu Sir Kamisese Mara
has reiterated that he does not want any foreign intervention to end
the hostage crisis at the parliamentary complex which entered its
fourth day today.
Ratu Sir Kamisese said: "I do not wish to see any overseas
intervention, physically".
The President was answering questions from local journalists yesterday
after making his third nationwide address about the hostage crisis.
A group of armed men, led by self-styled leader, George Speight who
appointed himself Prime Minister on Saturday, stormed into parliament
on Friday morning and took Prime Minister Mahendra Chaudhry, his
Cabinet and other MPs hostage. Nine MPs and Chaudhry's bodyguard were
released early yesterday morning after they reportedly signed
resignation letters. There's been no further release of hostages.
"I think we have the personnel to terminate what is happening (in
Parliament). We are just waiting to see if they will come to their
senses and see that it is futile to carry on any further, and that
they should sit down and talk," Ratu sir Kamisese said.
Speight and his group say they acted in the interests of indigenous
Fijians. Speight claims he has abrogated the Constitution and assumed
executive control. The President declared a state of emergency on
Friday to maintain law and order.
When asked whether firm action can be taken against the perpetrators,
Ratu Sir Kamisese said he could neither say "aye nor nay - that is the
matter for the security forces".
"I don't want the people in there (inside Parliament) to know what
action I'm going to be taking. The action that we want to be taken is
for those people inside to lay down their arms, and let's talk," he
said.
Ratu Sir Kamisese was asked what would be the consequences of the
hostage crisis, it is not resolved soon. "Disaster," he said.
"We have had this bit of taste before in 1987. And I think we will
have to go through it again, maybe one or two devaluations you never
know. That's the price we will have to pay."
Meanwhile, Australia says the hostage crisis is doing enormous damage
to Fiji's international standing and economy.
Foreign Minister, Alexander Downer, said he has offered Sir Kamisese
Mara all practical help in ending the four-day siege.
Downer told CNN that the President Mara believes there's no need for
Australia to get directly involved.
The Foreign Minister said the leader of the gunmen, George Speight
must respect Fiji's Constitution by releasing the Prime Minister
Chaudhry.
The President held a meeting with the Chairman of the Great Council of
Chiefs, Sitiveni Rabuka this morning (May 2). Rabuka has been
mediating between the President's Office and the self-styled leader of
the armed group to try and end the hostage crisis.
Last night it was reported on local radio that Speight did not want to
negotiate with Rabuka any more because of the former Prime Minister's
comments against the group.
Rabuka said many indigenous Fijians agree with the cause being
championed by Speight, but they don't agree with the actions he has
taken.....PNS (ENDS)
PACNEWS Second Edition 21 May 2000 Page 2 (c) Copyright PIBA 2000
Pacific Islands Broadcasting Association, Private Mail Bag, GPO, Suva,
Fiji Islands Phone (679) 315 732, Fax (679) 315 379
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