Government Receives $103.3 Millon from RBF Net Profit

The Reserve Bank of Fiji (RBF) have record net profit of $102.2 million for the financial year ending 31 July 2023.

RBF Governor, Ariff Ali said all-time high profit directly resulted from higher interest rates in the global financial markets and prudent management of the nation’s foreign reserves invested in the major trading partner economies.

The RBF submitted its audited financial statements along with its operations report for the year ended 31 July 2023 to the Deputy Prime Minister and Minister for Finance, Biman Chand Prasad, yesterday as required under section 56 of the RBF Act. The audited 2022-2023 financial statements were signed at a special board meeting yesterday.

Breakdown of financials

As required under the Act, $103.4 million will be paid to the Government, including $2.1 million being one-fifth of the Revaluation Reserve Account, after a net transfer of $1.0 million to the general reserves.

This compared to $44.4 million transferred to the Government for the 2021 to 2022 financial year. Governor Ali also indicated that future profits to the Government will be contingent on the foreign reserves holdings and interest rates in international financial markets.

Mr Biman thanked and congratulated the RBF Board, Governor, management and staff on the finalisation of its 2022-2023 audited financial statements.

“I acknowledge the record net profit of $102.2 million for the financial ending 31 July 2023.

“This is an all-time high profit recorded by the RBF and it signifies the prudent, carefully thought-out investment of our foreign reserves and the favourable global interest rate environment in key countries like US, Australia, New Zealand.

“It requires the skills and the leadership and the way RBF would have invested to make sure we get the profit.

“The Government subsequently will receive $103.4 million which includes the profit of $102.2 million plus $2.1 million being one-fifth of the Revaluation Reserve Account – this is after a net transfer of $1.0 million to the General Reserves as approved by the Ministry of Finance. This profit is the highest ever of any government entity. I think the last one was the Airports Fiji, so this announcement by the RBF breaks all the records,” Mr Prasad added.

Governor Ali added that the Bank had continued to satisfactorily achieve its key objectives of low inflation and maintaining an adequate level of foreign reserves.

“Annual headline inflation averaged 2.7 per cent in the 2022-23 financial year, primarily influenced by imported inflation.

At the end of July 2023, foreign reserves were adequate at $3.6 billion, sufficient to cover 6.3 months of retained imports.

“Given the comfortable outlook of the bank’s twin monetary policy objectives, an accommodative monetary policy stance was maintained throughout the review period to support Fiji’s post pandemic economic recovery.

“The financial system, with gross assets of $28.7 billion, remained strong and well capitalised, supported by both offsite and onsite prudential oversight,” Mr Ali said.

The RBF also achieved some key milestones in the reporting year, including the launch of the upgraded Real Time Gross Settlement and the establishment of a new Central Securities Depository system.

Governor Ali highlighted that despite the weakness in the global economy, mainly from tighter monetary policy in major countries, the Fijian economy remains firm on its recovery path, led by a strong rebound in tourism-related sectors. Following a 20.0 per cent growth in 2022, the Fijian economy is projected to grow by 8.0 per cent this year and moderate to 3.8 per cent in 2024.

Meanwhile, as the bank celebrates 50 years of central banking, the board of directors thanked the staff of the RBF, as well as all the bank’s stakeholders, for their continued support, resulting in the bank achieving its key outputs and looks forward to their ongoing support in the 2023-2024 financial year.

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