Fiji moved early in the period from a fixed exchange rate to a currency basket link (with no pre-announced target, and weights undisclosed and periodically adjusted). Monetary policy gradually evolved to being operated through limited OMOs and a policy rate, but the primary nominal anchor remained the heavily managed exchange rate.
|Years||Targets and attainment||Classification|
|1974||currency pegged to USD from February 1974 (previously to GBP); new (1973) Central Monetary Authority (CMA) has forex and minimal monetary policy role||augmented exchange rate fix AERF|
|1975-2017||from April 1975 currency fixed daily on basis of currency basket (undisclosed weights) with aim of stability of real effective rate; CMA sets reserve and government securities requirements for five foreign- and one government-owned banks, regulates interest rates and later turns to credit controls, with concerns for balance of payments/reserves, price stability and growth; currency basket weights revised at intervals but remain undisclosed; 1984 CMA becomes Reserve Bank of Fiji (RBF) with more complete central banking powers, setting reserve and liquid assets ratios, some credit guidelines, and the rates on its transactions with banks; gradual moves to encourage competition between banks and growth of government securities market; new instrument of special deposits 1985; interest rate controls dismantled mid-1987; two coups d’état in 1987 with large negative economic shock (including capital flight and emigration of skilled labour), monetary authorities respond with devaluations, monetary tightening and stricter capital controls; 1989 limited shift towards general liberalisation, but significant controls of various kinds remain; RBF issues own notes from 1989 to help control excess liquidity, and such issues become primary monetary instrument; 1991 RBF ends its short-term lending facility for banks; mid-1990s failure of major state-owned bank; ongoing improvements in bank supervision; 1998 devaluation; further coup 2000 leading to international sanctions lifted only 2002; further coup 2006 followed by international sanctions and continued political turmoil surrounding the military government, until new constitution 2013 and election 2014; devaluation 2009; new operational framework 2010 based on sale and purchase of RBF bills and designated policy rate, but monetary transmission mechanism remains weak||loosely structured discretion LSD|
Selected IMF references: RED 1974 pp19, 26; SR 1974 pp8-9, 14, 17; RED 1976 pp18-19, 28, 54; SR 1976 p9; RED 1977 pp19-20; RED 1978 pp17-18; RED 1981 pp21-2; SR December 1982 p13; RED January 1984 pp25-6, 37-8; RED January 1985 pp28, 29; RED November 1985 p32; RED1986 pp25, 39-40; SR 1988 pp4-5; RED 1989 pp27-8, 37; RED 1991 pp28-9; RED 1993 pp25-7; RED 1994 pp22-3; SR 1996 pp5-7; SR 2004 pp10-11; SR 2009 pp16, 22; SR 2011 pp9-10, 13-14; SR 2013 pp7-8, 11-12; SR 2018 p8.
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