Commercial banks play an important role in the transmission of monetary policy in Fiji. Over the last two years, the Reserve Bank has focused its policy on creating an economic environment that is conducive to investment and growth. To this effect, the overnight policy rate has been reduced further to 1.5 percent and a passive approach to liquidity management was adopted.
As a result, it is anticipated that commercial banks and other market interest rates will generally further decline. The downward movements in interest rates expected to provide incentives, for investors to borrow and pursue business  BIS central bankers’ speeches  1  opportunities, raise household’s disposable income and more importantly boost the economic recovery.