focus. more and more, bankers are walking about offering innovative products that best address customer needs. modernisation modernisation and technology has catalyzed this new financial age. the provisions of atms, phone banking, internet banking and so forth have provided customers easier access to financial services from the comfort of their homes and offices. i am glad to say that fiji is not lagging too far behind the rest of the world in financial technology and innovation. i appreciate the commercial banks ’ effort to modernise our financial system. a lot has been done in this automation and modernisation. later this year, the reserve bank will be introducing an automated payments system which will facilitate faster clearance of cheques amongst banks. i wish to thank the banks for their support and guidance in this project. the fiji economy let me say a few words on the economy. our estimate before december last year was for the economy to grow by around 2 percent in 2007. this projection as you know is no longer relevant. we now expect the economy to decline by 2 to 4 percent in 2007. i know that this growth range is a bit wide. but it is deliberately left wide as we are still evaluating the full impact of the political crisis on the economy. to make matters worse, the impact of the recent flooding in the west and the north will now need to be factored into this scenario. unfortunately, we have carried many economic problems with us for some time. sugar continues to struggle. fishing, forestry and agriculture have not performed to their potential. production of garments is now less than half of what it used to be. the mining of gold has now stopped altogether. the political crisis has brought an additional dimension to these challenges. our exports of goods are not doing well. to make matters worse, imports are booming. and to make matters even worse, the rise in the price of oil has come at the worst possible time. our oil imports are four times what we used to pay some six years ago. the balance of payments therefore continues to come under pressure. this is the number one challenge that we face. reviving exports is the key. the only bright spot in our scenario is tourism. it has been the driving force of our economic growth since 2000. tourism will play a critical part in our economic recovery as it did in 2000. we hear some good news that tourism is bouncing back very quickly and we hope that this continue. without tourism, it is fair to say that the economy would have been worse off.

my view, we really have none. using other monetary instruments is not an alternative. our efforts to raise exports need to bear fruit sooner rather than later. with exports rising, interest rates will come down naturally and, more importantly, sustainably. i am confident that we can achieve this within the next three years. i wish to thank the commercial banks for their understanding and support in our effort to address this economic challenge more so after december 5th last year. we do we go from here? all i can say at this time is that the economic picture will need to become clearer on the sustainability of our foreign reserves before we can be able to review the existing stance of monetary policy. however, i know that the liquidity in the market place is extremely tight and we expect it to remain so for some time. this puts a lot of pressure on lending rates. therefore, when necessary, the reserve bank will release funds into the system to moderate liquidity and ease undue pressure on interest rates. let me also assure you that our financial system is sound. the comprehensive review of our financial system undertaken last year by the international monetary fund and the world bank confirmed that this is so. concluding remarks finally, i would like to thank mr. mellsop for inviting me here today. i must say that the colonial group has contributed well to the development of the fiji economy. it offers a diversified range of financial services in banking, insurance, property and trusts. it has invested considerably in the provisions of its services and widening its outreach to the community. the group has grown strongly in the last five years. i congratulate you on the opening of your 18th branch. i take this opportunity to wish the colonial team all the best in its future endeavors. official opening i have much pleasure in declaring this namaka branch of the colonial national bank open. thank you.