February 7, 2008

Fiji remittances decline by 27pc

06 FEB 2008-www.fijilive.com

Remittances to Fiji have declined by 27.3 per cent cumulative to November when compared with the same period in 2006, the Reserve Bank of Fiji says.

In the latest economic review, the RBF says this has contributed further to subdued consumption activity.

In 2006, remittances brought around $350m in foreign exchange earnings. It is unclear what the remittance inflow is for 2007.

Local money transfer exchanges agree that remittances into Fiji are declining.

One dealer, Exchange World (Fiji) Ltd experienced a 10 per cent drop in remittances last year.

Manager SP Chung says most of their remittances came from Kuwait (from soldiers or bodyguards stationed in Iraq).

Chung says he does not know the reason behind the decline and nor could he project an outlook for 2008. The company has one branch in Suva.

Army spokesperson Lt Col Sitiveni Qiliho says soldiers and bodyguards stationed in Iraq usually go to Kuwait to send money back home. He says the number of people stationed in Iraq has not declined.

However, he says it is possible that money is now being sent through those soldiers coming home on leave which means the money is not going through the exchanges.

Lotus Foreign Exchange Ltd which has five branches around Fiji says it has also experienced a drop but could not say by what percentage.

Manager Ajay Kumar feels the drop could be because of the poor exchange rates.

“Maybe the rates are not good enough for the foreigners to get the inflow to Fiji.”

He says most of the money coming through their agency is in US dollars and from New Zealand (where the company headquarters is located.)

He says remittances had started declining from 2006. “When you compare rates, it is largely affecting the US dollars.”

For instance, he says before $US1000 would bring in about $F1800 but that has now dropped to about $F1400.

“It does not matter how much you are sending, the rates will go down here. So in general there is a decrease”

Kumar feels that 2008 could see a further decrease in remittances.

Last year, Finance Minister Mahendra Chaudhry had said high costs are incurred by people remitting money to Fiji

He said this is clearly not acceptable and that he had asked the Reserve Bank of Fiji to look into the matter with due urgency.

Kumar agreed saying this could be one factor. “Costs are getting high to send money to Fiji.”

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