and the outlook is not very good. so, i had no choice but to act at this time. the other good thing was that inflation rate had declined substantially so it provided the right time for devaluation. the inflation rate was only 0. 5per cent recently, on an annual basis. with devaluation inflation rate is going to go up quite rapidly. inflation is low and you have balance of payment problem, so i think, devaluation is the right way to go. you also know that there was huge speculation in the market place, even people talking about certain percentages of devaluation. so, when that happens capital starts to move out of the country. we can ’ t afford that. so, i had to act very swiftly, which i did on wednesday 15th april to devalue the f $ by 20 percent. question 3 : so what are the benefits of the 20per cent devaluation of the fiji dollar immediately? answer : the immediate effect is that all our exporters are going to receive 20 per cent more in fijian dollars. our tourism is going to benefit greatly. the global crisis is really affecting our tourism sector and it is going to have greater effect later on. we had to correct this situation. we cannot go on the way we were doing. one more thing, because our major source markets – australia and new zealand are in recession and their currencies had fallen against the us $ substantially. in our case, our fijian dollar was strengthening ; fijian dollar, for few months, was stronger than new zealand dollar. how can you have that? so, it was becoming extremely expensive for australians and new zealanders to come to fiji. now it would be cheaper for them to come to fiji and of course when they come they bring with them foreign currency. our employment in the tourism sector is going to grow and our tourism industry will put more investment and i ’ m sure that it will have very positive effect all around for all the exporters. question 4 : were there any other options other than devaluation whereby you could have handled the current situation? answer : as i explained to you, i think we had used up all the options and the time was right to move on the currency. question 5 : concerns have been expressed that the devaluation would mostly affect the poor so how do you think the pinch felt by the poor will be cushioned? answer : no, everybody will be affected by devaluation

the country. i ’ ll give the example of 2007 – the economy declined by 6. 6per cent and the banks made huge profits. i have all the information with me – what each bank makes, what is their spread, for how long and how they quickly adjust their rates to maintain their profitability. so, it ’ s the rest of the population which bears the brunt of adjustment while the banks maintain their profitability. to me that is unacceptable. i want to give a very clear signal to the banks that i ’ m not interested in controlling the interest rates but i want to see banks behaving responsibly in our economy. they must support the growth of our economy. they operate here. if we all do well, we all benefit, if we go down, let ’ s all go down together. i do not like some sections to take advantage of the situation. that is my sole reason to introduce the policy, which is very unprecedented. question 7 : how will the devaluation affect the sugar industry and agricultural sector? answer : very positive – they will get 20 per cent more revenue immediately and they ’ ll be encouraged to grow more food, those who are exporting eggplants, chilies and all sort of things, i would encourage them to grow more food – not only for exports, but grow more food for local consumption as well. and this devaluation is going to give that nudge which was required. question 8 : going back to banks – very soon banks will be advised to open up micro finance units, what is the purpose of micro - finance and how will it affect the economic growth? answer : that is another area that we have been having long conversations for a number of years, as far as 20 years back. i ’ ve been personally talking to banks. please, can you do something, change your banking practices, and don ’ t just concentrate on big businesses. you ’ re operating in fiji. we are a developing country. we are spread along the islands. see how we can grow the rural sector. that ’ s where the future of the country is. it ’ s the rural sector we need to grow. without the right kind of financing structure our rural sector can not grow. they have all the resources – fiji doesn ’ t lack resources. it ’ s got all the resources it needs. we need somehow to get the capital to work with the resources. and the banking system can facilitate that. this