The past week bloggers in Fiji have had a lot to say about the devaluation of the Fiji Dollar.
On April 15, the Reserve Bank of Fiji devalued the Fiji Dollar by 20 percent, making it cheaper compared to other currencies. This means that more Fiji dollars are needed to purchase goods from outside the country. For overseas buyers, products in Fiji will now be less expensive.
The tourism industry welcomed the decision, saying cheaper prices will bring more tourists. Others say devaluation will affect the country’s poorest, especially when the government decided to decrease the retirement age to 55.
Loyal Fijian calls this devaluation is one of the most severe moves taken by a government in Fiji.
There can be no denying now that we are in serious trouble folks.
The smart businessman who are well connected would have been tipped off and squirreled their loot offshore before this announcement. The common man and woman will now pay more for all our imported products.
So next time you go to the shops to buy noodles, mackerel, powdered milk and just about anything else, you will pay more.
And this is on top of the inflation rate which surely must rank in the double digits now.
The Fijian economy has been hit hard before, inevitable when you consider the amount of political turmoil we have had. But we have come out without the economy collapsing.
On Twitter, gilbertfiji has advice for expat Fijians.
fijians working abroad? now is a good time to send money to fiji, after the Fiji dollar devaluation.
A post on the blog Intelligentsiya argues against it.
Perhaps the grand plan is to lure foreign exchange into the country leaving the majority of our citizens to tussle with hiked costs to 20% of imported goods. It includes essentials such as mortgage payments, food (rice, flour, potatoes), fuel, medicines, building materials etc and guess who has to pick up the short-fall or face the social impact consequences? Yes you Bainimarama. The “apolitical” tourism industry (we have not forgotten just how “apolitical” this group was in fighting Qarase’s draft qoliqoli legislation), will also bear increased costs of food importation that domestic production standards can’t meet.
The hint that exports will peak from the devaluation is shakey. Our export earning mainstay, the sugar industry, which still has lost its core buyer the EU has been on a consistent downward free-fall. The rise in domestic costs to boost exports effectively cancel out any savings as economist Satish Chand points out delicately.
Essentially no new money will make its way into the economy and the begging by the illegal RBF Governor that We the People need to bear inflation for only 12 months is ridiculous and downright arrogant. What more can this illegal regime suck out of its citizens?
Fiji's poor will be hit hardest, writes Raw Fiji News.
Following the devaluation of the Fiji dollar by 20%, inflation or cost of living in Fiji is expected to rise given that the cost of imported food items and things will become more expensive due to the weakened Fiji dollar.
This means that the cost of rice, flour, tea, and other basic items will increase hitting the pockets of poor people very hard.
Expect to pay more for bus fares and fuel in the next few weeks as Fiji’s biggest import commodity, fuel, will be more expensive to buy.
It is time to go back to the land and start planting your own food people.
Buy local made products, vegetable and fruits and cut off the fat from your weekly budget list.
Talking Fiji underlines the point that investor confidence brings investment, not cheaper currency.
I personally don’t see how the RBF (Reserve Bank of Fiji) and the interim regime can encourage foreign investment by devaluing our dollar, because any economist will tell you that this will hurt us more than it will benefit us.
I suppose this is why it is a ‘last resort’ option.
At the end of the day foreign investors will come to Fiji if the political situation in this country is resolved, the military return to the camp and the rule of law and democracy are restored.
Investor confidence is what brings in foreign dollars, not devaluation.