Reserve Bank of Fiji

Reserve Bank of Fiji
	Reserve Bank of Fiji (tall building on the left) in Suva
Headquarters	Suva
Established	1 January 1984 (commenced operations)
Ownership	100% state ownership
Governor	Faizul Ariff Ali
Central bank of	Fiji
Currency	Fijian dollar; FJD (ISO 4217)
Reserves	820 million USD
Preceded by	Central Monetary Authority of Fiji
Website	www.rbf.gov.fj

The Reserve Bank of Fiji (RBF; Fijian: Maroroi Baqe ni Viti) is the central bank of the Pacific island country of Fiji. Its responsibilities include the issue of currency, control of the money supply, currency exchange, monetary stability, promotion of sound finances, and fostering economic development.

The Bank is the only institution that is permitted to issue Fijian dollars (FJD) and put them into circulation. It is also responsible for setting the overnight policy rate, the main policy or bank rate for Fiji.

Background

In 1914, the colonial government established the Currency Board with the sole right to issue Fijian pound notes and coins in the then Colony of Fiji. Following independence from Britain in 1970, the Central Monetary Authority (CMA) was created in 1973 and took over the issuing of currency and further expanded responsibilities.

The CMA was tasked with regulating the issue, supply, availability and international exchange of the Fijian dollar (FJD); with promoting monetary stability and a sound financial structure; and fostering credit and exchange conditions for the economic development of Fiji. It also acted as a banker to the government.^[3] By the 1980s, the government of Fiji wanted to expand its role and the Bank of Fiji was created by the Reserve Bank of Fiji Act of 1983, replacing the CMA.^[4]

Statutory responsibilities

The functions, powers, and responsibilities of the Bank were specified in the Reserve Bank of Fiji Act, 1983. The principal purposes of the Bank as stated in Part 2, Section 4, of the Reserve Bank Act were as follows:^[4]

to regulate the issue of currency, and the supply, availability, and international exchange of money;
to promote monetary stability;
to promote a sound financial structure;
to foster credit and exchange conditions conducive to the orderly and balanced economic development of the country.

In 2009, following the 2007–2008 financial crisis, amendments expanded the bank's responsibilities to include the regulation of the insurance industry, securities industry, and capital markets.

Departments

The Bank has four main departments: economics, financial markets, financial institutions, and currency and corporate services. The key roles of each department are as follows:

Economics

The Economics department's main responsibility is to conduct economic analysis and provide advice on the formulation of monetary policy. Some of the key tasks performed by the department are as follows:

Monitoring economic and financial developments and providing advice on appropriate monetary policy settings in Fiji;
Undertaking research and preparing economic forecasts;
Writing and coordinating the Bank's publications; and
Coordinating economic policy with relevant authorities.

Financial Markets

The Financial Markets department has the primary responsibility for implementing monetary policy, managing Fiji's foreign reserves, and providing banking services to the government. It also handles foreign exchange regulation and control as well as exchange rates. Its key functions include:

Conducting open market operations to achieve operational monetary policy targets;
Managing Fiji's foreign reserves;
Maintaining appropriate exchange rate arrangements;
Acting as a fiscal agent of the Fiji Government and registrar for debt instruments issued by the Fiji Government. This function has also been extended to a number of statutory corporations;
Providing banking services to government and commercial banks; and
Administering exchange controls to monitor and regulate capital flows through the banking system.

Financial Institutions

The Financial Institutions department's major objective is to maintain a sound market-based financial system through the supervision of licensed financial institutions and the insurance industry. Key areas of duties include:

Regularly reviewing international developments in the area of financial system supervision and payment system structure and their impact on the supervisory arrangements in Fiji;
Supervising licensed financial institutions and maintaining confidence by minimising detriments to the interests of depositors and policyholders;
Processing applications for those wishing to become licensed banks, credit institutions, insurers, brokers, and agents; and
Ensuring that prudential policies and guidelines are up to date and that licensed institutions conform to these standard requirements.

Currency and Corporate Services

The Currency and Corporate Services department has primary responsibility for currency issues and internal administration of the RBF, including financial reporting and human resources management. Its key areas of work include:

Ensuring availability and supply of good quality currency;
Ensuring that the Bank has a qualified and trained workforce to meet the output requirements;
Providing support services to other departments in the Bank; and
Ensuring that the financial accounts of the Bank are prepared in a timely manner.

Other activities

The RBF is also active in promoting financial inclusion policy and is a member of the Alliance for Financial Inclusion (AFI).^[5] It is also one of the original 17 regulatory institutions to make specific national commitments to financial inclusion under the Maya Declaration^[6] during the 2011 AFI Global Policy Forum.