Printing more money will lead to a huge inflation

Minister for Economy, Aiyaz Sayed-Khaiyum says there will be a huge inflation in the country if the Reserve Bank of Fiji prints notes valued at $1 billion as the value of the Fijian dollar will come down.

Sayed-Khaiyum made this comments after Nadi Chamber of Commerce President, Doctor Ram Raju asked him on whether the Reserve Bank of Fiji can print $1 billion and give it to the Ministry of Economy at a zero percent interest rate. Doctor Raju says he wanted the clarification as this has been suggested by one of the economists.

Sayed-Khaiyum says this step will not be taken by RBF.

While responding, the Attorney General has also revealed that the country’s Debt to Gross Domestic Product Ratio is expected to go higher than 60 percent as government revenue is not as strong as it used to be.

The Minister for Economy says prior to COVID-19, 70 percent of the government’s borrowings has been onshore and 30 percent has been offshore.

However he says going forward, the government plans to borrow more money offshore because if you have less tourists coming in, the foreign currency levels will go down. He says they need to maintain healthy foreign reserve levels.

Sayed-Khaiyum says this is fine for now but foreign reserves could get depleted soon if we do not have tourists coming in and exports don’t pick up.