and financial account, which reflects net foreign investment, as well as the drawdown in foreign reserves, and unaccounted inflows. unaccounted inflows reflect those items that are not adequately captured by the fiji islands bureau of statistics. this year, unaccounted inflows are forecast at around $ 721 million. money and credit developments • money and credit : private sector credit growth ( 7 % ) has stabilised somewhat, from the slowdown over 2007. the recent pick up in private sector credit has been led by credit to the real estate and wholesale, retail, hotels and restaurant sectors. • commercial bank ’ s investment and consumption lending : investment lending has picked up ( 15 % ), owing in part to allowances made in the administration of the credit ceiling, as special approvals for investment - related projects are given to commercial banks to lend above their ceilings. consumption lending has also stabilised – the recent pick up ( 9 % ) reflects base effects. it is not expected to rise to double digit growth. • commercial banks ’ private sector lending : despite the credit ceiling imposed by the reserve bank, lending to the private sector has exceeded the credit ceiling due to special approvals given by the reserve bank for special investment projects. special approvals have totalled $ 272 million. approvals for building & construction have reached $ 140 million followed by transport, storage & communication ( $ 21m ), electricity, gas & water ( $ 16m ) and manufacturing ( $ 16m ). other miscellaneous approvals totalled $ 79 million. • interest rates : the lending rate of commercial banks has trended down since early 2007 to around 8 percent in august. • inflation : inflationary pressures will continue through to the end of the year. inflation is expected to rise slightly above 9. 5 percent in the coming months before settling at around 7. 5 percent by year end. higher inflation is due mainly to fuel and food commodity price increases in the international markets. • foreign reserves : in recent years, monetary policy was focussed on protecting foreign reserves. foreign reserves levels are holding up well at around $ 911 million. current levels are sufficient to cover close to 4 months of imports of goods. this is a comfortable level. • exchange rates : over the year to september, the fiji dollar strengthened against the nz and australian dollars by around 7 and 5 percent, respectively. however, the fiji dollar fell against the euro and us dollar by 6 and 4 percent,

fiji, and no longer the “ new kid on the block ”. that title belongs to another bank now. you have adjusted well and in line with the economic conditions faced here. you continue to make significant contributions to fiji ’ s financial landscape in partnership with a wide group of stakeholders. i read recently that bsp won the connected world forum award for the best bank - led mobile money programme at the mobile money global summit and expo in dubai. the connected world awards celebrate the very best in mobile money with specific emphasis on innovation & service. congratulations are definitely in order. bis central bankers ’ speeches innovation is definitely a hallmark of bank south pacific ’ s services being provided across fiji and we are fully appreciative of your new technology rollouts. you were the first bank in fiji to introduce sms banking and you rightly boast the largest network of atms and wireless eftpos machines across the country. i note that this refurbished branch has revamped its customer service areas. understandably there has been a migration to the second floor, but also there is a new foreign exchange bureau accessible to the street. this is no doubt a natural response to the tourist traffic through nadi on a daily basis. you have all now had an opportunity to look at our new flora and fauna series of notes and coins, which have been in circulation since the 2nd january. we hope that the fiji public will be proud of their new currency and that it will continue to be a source of pride for all fijians for a long time. we at the reserve bank trust that the images on our currency will quickly become household names and provide instant recognition of our heritage and of the beauty that surrounds us here in fiji. the reserve bank will continue to roll out its awareness campaigns over the next several months, including to schools. logistically, in terms of issuance of our new currency, all the coins and the $ 10, $ 20, $ 50 and $ 100 notes commenced issuing on the 2nd january. however there will be a co - circulation period with most of the old design currency notes up to december of this year as we run down stocks. this co - circulation will not apply to the old $ 2 and $ 5 notes. the old design coins will remain in circulation, so for those who are already missing the queen you may take some comfort in this. the new $ 5 polymer or “ plastic ” note will be issued once we have withdrawn the existing $ 2 notes from circulation. this is