Monetary Operations and Liquidity Dynamics in Fiji
Selected Issues Papers, June 23, 2026
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- Monetary Operations and Liquidity Dynamics in Fiji
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Bibliographic details
- Authors: Sandra Milena Benitez Celis, Matteo Ghilardi, Shivneel Kirpal
- Published: June 23, 2026
- Series: Selected Issues Papers
- DOI: https://doi.org/10.5089/9798229052306.018
Summary
- This paper examines the implementation of monetary policy in Fiji, with a focus on liquidity dynamics and their implications for monetary transmission.
- It documents how persistent surplus liquidity—shaped by foreign exchange inflows and fiscal cash-management practices—has influenced the transmission of the policy rate and short-term money-market conditions.
- It assesses how liquidity conditions have interacted with the existing operational framework and discusses options to strengthen monetary implementation and transmission.
Key findings on liquidity dynamics and monetary transmission
- Persistent surplus liquidity has been a defining feature of Fiji's money market.
- Surplus liquidity has been shaped by:
- foreign exchange inflows
- fiscal cash-management practices
- Effects documented:
- Influence on the transmission of the policy rate.
- Impact on short-term money-market conditions.
- Interaction between liquidity conditions and the existing operational framework has affected monetary implementation.
Policy options and recommendations (themes discussed)
- Options to strengthen monetary implementation and transmission are discussed, focusing on:
- improvements to the operational framework to better manage surplus liquidity
- adjustments to liquidity management practices to enhance the pass-through of the policy rate
- consideration of measures addressing the drivers of surplus liquidity, including foreign exchange inflows and fiscal cash-management
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- Monetary Operations and Liquidity Dynamics in Fiji