The Fijian financial system has remained resilient despite specific challenges that have impacted on global financial stability such as the 2023 March banking stress, the slowdown in global growth and escalation in geopolitical tensions.
This has been highlighted in the Reserve Bank of Fiji’s Financial Stability Review which outlines the central bank’s assessment of the state of, and risks to the stability of the Fijian financial system by assessing how developments in the global and domestic markets affect the financial health of Fiji’s households and businesses, and the financial performance and soundness of financial institutions in Fiji.
Risks to the Fijian financial are monitored though the regulatory assessments of seven (7) key areas of: global environment; macroeconomic risks; credit risk; market and liquidity risk; systemically important financial institutions (SIFI) risk; risk appetite and; capital & profitability.
RBF Governor, Ariff Ali in releasing the Review states that “while credit risk remains the major area of concern for the banking industry, the Fijian financial system remains strong and well capitalised.
He however said risks remain slightly elevated, in view of the consequences of fiscal measures announced in the FY 2023-2024 National Budget, and the implications these may have on general economic sentiments and especially households’ disposable income and debt serviceability in the short to medium term.
Ali said ensuring financial stability is one of the two key stability mandates of the RBF and the ongoing publication of its Financial Stability Reviews brings to the fore its important role as the regulator of the Fijian financial system.
Commentaries on pertinent issues regarding the safety and soundness of systemically important financial institutions, measures taken by the RBF to manage the impact of the COVID-19 pandemic, results of the system-wide stress tests conducted to assess banking sector resilience, and the results of the Credit Conditions Survey undertaken in 2023, are also part of the 2023 Financial Stability Review and should be of interest to those who wish to better understand how financial stability is maintained by the RBF.
