savenaca narube : a few words on fiji ’ s economy and financial system opening address by mr savenaca narube, governor of the reserve bank of fiji, at the official opening of credit corporation ’ s new head office at 10 gorrie street, suva, 19 november 2007. * * * your excellency, the papua new guinea high commissioner to fiji, mr. peter eafeare sir henry torobert, former chairman of credit corporation ( for 14 years ) and former governor bank of papua new guinea ( for 21 years ) mr. noreo beangke, group managing director credit corporation mr. rob allport, the first general manager of credit corporation fiji limited board directors of credit corporation mr. ross mcdonald, managing director, credit corporation fiji limited distinguished guests ladies and gentlemen introductory remarks a good evening to you all i am pleased to be here this evening for the opening of credit house – credit corporation fiji limited ’ s new head office. i take this opportunity to congratulate credit corporation for its 15 years of service to fiji. i have watched the growth of the company with interest during these 15 years. it has come a long way. its assets have grown. the quality of its loan book has significantly improved. apart from its head office in suva, it has opened offices in nadi and lautoka. the number of its employees has risen to over forty. its products have expanded and now include lease and asset purchasing, fleet leasing, personal finance, insurance premium, pre - finance vehicles and investment facilities. understandably, the first few years of operations in fiji were difficult for ccfl. they have come through well. ccfl now have a sound business with prudent financial management and i am pleased to say in compliance with reserve bank requirements. the corporation can look back at its 15 years in fiji with great satisfaction. i can confidently state that credit corporation has played a valuable role in advancing fiji ’ s financial system and economic development. credit corporation fiji limited ccfl ’ s entry into the fiji market in 1992 was instrumental in bringing finance and increasing competition to that secondary market. its financing reaches out to many key sectors like the bus industry, pine, timber and logging and the major transport industry for ten - wheeler trucks and trailers. in addition, i am told that they also have as clients both large and small businesses and across all sectors of agriculture financing the movement of farm produce and cane harvesters in the sugar industry as examples. this

confidence and sentiment were weak. international predators, with meticulous preparation and organisation, launched an attack on the hong kong dollar and our financial markets. they first discreetly borrowed hong kong dollars and waited for the right moment to profit by short selling the currency and attacking our linked exchange rate system. at the same time, they built up substantial short positions in the stock and futures markets. these global predators also spread doomsaying through the hong kong media to stoke panic among hong kong people, creating an environment ripe for their short selling activities. the hang seng index ( hsi ) dived 50 % to 8, 000 in august 1998 from 16, 000 a year earlier and the predators boasted they would push down the hsi by another 50 % to 4, 000, which was an extremely low level. aggregating the earnings of all listed companies, when the hsi was at 8, 000, the price - earnings ratio was eight, and if the index fell another 50 %, the ratio would drop to just four. the hong kong sar government was facing a “ double - play ” by the predators – manipulation and profiteering in the money market and stock market through massive short - selling. it was a critical situation – not only were we confronted with a sharp fall in the stock market and great losses to shareholders, there were also systemic risks to our monetary system and financial markets. classical economics does not differentiate between big and small markets and assumes that market prices will not be manipulated by just a few players. reality, however, is different from theory. at that time, the market capitalisation of the hong kong stock market was only us $ 340 billion, a mere 3 % of the new york stock exchange ’ s us $ 10. 3 trillion. the predators were unable and hence did not choose to make their move on the big us markets, but were able to plunder hong kong ’ s mid - sized and open market with impunity. 5. however, on 14 august 1998, with the authorisation of the hong kong sar government and backed by the war chest of the exchange fund, the hkma intervened in the stock and futures markets through market operation to counteract the double - play by international predators. when the market operation was completed by the end of august, the hkma had used about hk $ 120 billion to acquire a vast amount of hong kong stocks, propelling the hsi from the pre - operation level of 6, 700 points to 7, 800 points