As discussed further below, a number of instruments, both existing as well as new, were employed to modulate liquidity conditions to achieve the desired objectives. A number of other factors such as increased competition, productivity gains  2  The Reserve Bank has raised its key policy rate – the reverse repo rate in phases – by 100 basis points since October 2004.
Unfortunately, the question of affordability is not as easy an option to some, if not, most Pacific Island countries because of resource constraints of their economies. The amount of money available to governments from their tax bases is not sufficient to offer attractive remuneration packages to compete in the skills market and meet other pressing social services for the population at large.