Sada Reddy: Military Mouthpiece Vowed "No More Devaluation"...

..yes he did.

In October 2009 Sada Reddy promised us, We The People, that there would be no more devaluations.

We wonder how he will be eating his words gracefully this time tomorrow and just how TF they will justify a whispered VAT Hike of 15%.

Reddy vows no more devaluation
Shalveen Chand
Saturday, October 24, 2009

THERE will be no more devaluation of the dollar, says Reserve Bank governor Sada Reddy.

Opening the Fiji Human Resources Institute convention yesterday, he said: "There was no other way to salvage the fast depleting foreign reserves brought about by the global financial crisis and the political crisis, which had an immediate impact."

Mr Reddy said when he took over as governor in April, Fiji had only enough foreign reserves to sustain just one month worth of imports.

"The devaluation was the only way to go as we could not waste time," he said. "When we have a political crisis, there is speculation regarding currency and there was such in Fiji, and to curb that, we took the difficult steps."

Mr Reddy said by last month, the foreign reserves had touched the billion-dollar mark.

He said that by mid-next year, the forecast inflation rate would drop by 2 per cent if the price of oil remained stable.

"There was speculation about another devaluation which did affect the economy slightly, but let me assure you there will be no other devaluation," Mr Reddy said.

He said that tough decisions were only successful because of the people who helped make the decisions.

"In 1998, I spearheaded a change in the RBF which saw almost 60 people lose their jobs, however, this step was taken with the future in mind," Mr Reddy said.

"Now we have all graduates who know what they are doing. The three-year change which began in 1998 was a move to bring about qualified people who would be able to stand out and help in dire times."

He said the human resource decisions taken almost 10 years ago had helped the RBF come up with sound policies that have salvaged the economy.

"We had asked the commercial banks not to increase interest rates but there were no initial policies however two banks went ahead and increased rates so we put in a policy to ensure that people did not suffer with increased rates which normally happens in crisis situations" said Mr Reddy.

One of the new changes that will be seen with the banks next year is micro-financing, banks have been told by the RBF to look at providing finances to people who do not fit the credit ratings.

Mr Reddy said that the RBF found that banks in Fiji had a much more better spread, rate of return than most banks.

"From January next year banks will have to have a microfinance unit. Banks have to change their minds about this. Banks will be involved with the RBF on how they can go about doing this."

According to Mr Reddy, he had to take up the post of governor of the central bank as there was a vast vacuum at the leadership level after the exit of Savenaca Narube following the abrogation of the constitution.

"People are the key to economic success and we have to ensure that we have a skilled labourforce, that will ensure sound decisions and practice, like the one that saw the RBF come together in time of a financial crisis."

Postscript:  Today's mini-budget announcement dictates a 15% VAT hike on imported vegies. No sign of a strongly whispered Devaluation.