Devaluation Disaster Looming?

Is a devaluation of the Fiji dollar in the wind?

 

I don’t want to be a doomsayer, but the sounds coming out the Reserve Bank of Fiji

are not good. RBF Governor Savenaca Narube’s call to cut consumption sounds a

lot like desperation.

 

People can’t starve to help the balance of payments. The problem is that export

earnings have slumped. Tourism was badly damaged by the coup and hasn’t

recovered. Efforts to restructure the sugar industry have been hit by the antics of

Chodopu$$, whose only concern is to assert his iron grip on everyone. Gold

investors have been harried and are probably waiting for a real government

before they sink large amounts of their hard earned funds into a country run by

desperate criminals.

 

 

Across the board, investment is at rock bottom levels as a result of the uncertainty

created by an illegal government which shows no respect for the law.

 

 

So the RBF says eat less. Savenaca Narube needs to move from his Tamavua palace

and mix with a few more real people. He would discover that food is a basic need that

cannot be easily reduced by poor people.

 

 

Chodopu$$ has been aware from the outset that food price rises could bring him undone.

That’s why he cut the small margins of protection afforded to some locally manufactured

goods. But he achieved nothing more than to damage local industry and create more

unemployment when Fiji could afford it least.

 

 

Chodopu$$ has been scared witless by the prospect of a devaluation which would send

inflation, already high, rocketing into the heights of a true banana republic. He has no

doubt been pulling every trick in the book to hide problems, but economic fundamentals

will not be bullied like political opponents or newspaper editors.

 

 

The democracy of the market is pervasive and persistent. It can only be slowed for so long,

and the longer it is delayed, the worse things get.

 

Like a wall of flood water created by levee banks, when the waters keeps rising and

eventually over top the levees, the result is devastation. I don’t want to see the currency

devalued, but if it does happen, let’s hope it sweeps away the incompetent, illegal gang

of thugs who have hijacked Fiji and its future.

 

 

In December 2006 Fiji’s currency faced serious problems. The coup then made devaluation inevitable. The incompetent Minister for Finance would have been smarter to have accepted

the advice of economists last year to devalue the currency, instead of trying to lie and bluff

his way through.

 

 

Anyone looking for signs of the inevitable devaluation should look at the Reserve Bank’s announcement of relaxation to the Forward Foreign Exchange Cover Facility. Narube said commercial banks could now enter into forward foreign exchange contracts with local

importers of rice, wheat, flour, edible oils and milk to hedge against future price increases.

 

How is this change a sign of impending devaluation? Look at the FTIB website which

describes the purpose of the Forward Foreign Exchange Cover Facility as “the Reserve Bank allowed commercial banks to withhold currency at the end of a trading day instead of selling

 to the Reserve Bank, to build up positions up to the limits on net open positions. The forward foreign exchange contract protects the exporter or importer from THE POSSIBILITY THAT THE FOREIGN CURRENCY WOULD BECOME CHEAPER OR EXPENSIVE IN THE FUTURE.”

I don’t think anyone is expecting the Fiji dollar to go up in value, so work it out for yourself.

 

 

With every day that passes it is clear that only the pigs with snouts in the trough are not

feeling the impact of the economic calamity visited upon Fiji by the actions of a selfish

coterie of coupsters in December 2006. Things will not get better until the rule of law is

restored in Fiji.

 

 

CORRUPTION FIGHTER

19 Responses to “Devaluation Disaster Looming?”

  1. fedup Says:

    Narube – quiet mover behind the scenes, covering up the doom and gloom.

  2. vakatakilai Says:

    It is really frightening to realise what Fiji will go through when reality surfaces in the very near future.

    This regime have tried justify its takeover of a so-called “corrupted” government by not doing everything that previous interim government did to stay afloat. They did these to try to convince the population of their reliableness and that they are here to save us from the doom that LQ and co were taking us to.

    2 things that come mind are:

    i) they did not abrogate the constitution; this to make them look legal or clean and trying to justify the illegal act by trying to live with the current constitution. They are regretting that decision today and because it has limited their flexibility and also gives power to their opposition. The charter was their vehicle they expect to carry through their illegal act but this is facing strong opposition. I expect them to start doing something about this and coming up with some excuse to do what they should have done in the first place.

    ii) against all advice from real economist who studied the economic factors and knew that devaluation was imminent, they once again tried to please the population. This act too, has not gone according to plan and as Corruption Fighter has observed, they cannot conceal the economic effects of the coup forever. Their patchwork solution is beginning to leak heavily and just like the constitution they are now regretting their original plan and are now taking steps to come up with an excuse to devalue the Fiji dollar.

    iii) they are now regretting their attack on the Fijian institutions. With the predominant Fijian army they think that Fijians will be blindly believe that they are working in their interest. Like the other plans, this too is finding strong opposition and they are currently openly enforcing it.

    Their are many other plans of this illegal regime that are not going to plan and this to me means they are in a very desperate situation.

    My advice to all my Fijian brothers and sisters is to remember that a cat in a corner is very dangerous. Expect it to come out in the open and just do things it wants without considering the will of the people. The Lau provincial council happenings should be an indication to us of how this desperate cat will start to act from now on.

    Rule by FORCE will now be the order of the day. Persecution will soon follow. Keep praying for strength folks!

  3. Kai Suva Says:

    RBS issues global stock and credit crash alert
    By Ambrose Evans-Pritchard, International Business Editor
    Last Updated: 12:19am BST 19/06/2008

    The Royal Bank of Scotland has advised clients to brace for a full-fledged crash in global stock and credit markets over the next three months as inflation paralyses the major central banks.

    “A very nasty period is soon to be upon us – be prepared,” said Bob Janjuah, the bank’s credit strategist.

    A report by the bank’s research team warns that the S&P 500 index of Wall Street equities is likely to fall by more than 300 points to around 1050 by September as “all the chickens come home to roost” from the excesses of the global boom, with contagion spreading across Europe and emerging markets.

    Such a slide on world bourses would amount to one of the worst bear markets over the last century.

    Fund managers react to RBS alert
    Support for the euro is in doubt
    RBS said the iTraxx index of high-grade corporate bonds could soar to 130/150 while the “Crossover” index of lower grade corporate bonds could reach 650/700 in a renewed bout of panic on the debt markets.

    “I do not think I can be much blunter. If you have to be in credit, focus on quality, short durations, non-cyclical defensive names.

    “Cash is the key safe haven. This is about not losing your money, and not losing your job,” said Mr Janjuah, who became a City star after his grim warnings last year about the credit crisis proved all too accurate.

    RBS expects Wall Street to rally a little further into early July before short-lived momentum from America’s fiscal boost begins to fizzle out, and the delayed effects of the oil spike inflict their damage.

    “Globalisation was always going to risk putting G7 bankers into a dangerous corner at some point. We have got to that point,” he said.

    US Federal Reserve and the European Central Bank both face a Hobson’s choice as workers start to lose their jobs in earnest and lenders cut off credit.

    The authorities cannot respond with easy money because oil and food costs continue to push headline inflation to levels that are unsettling the markets. “The ugly spoiler is that we may need to see much lower global growth in order to get lower inflation,” he said.

    Morgan Stanley warns of catastrophe
    More comment and analysis from the Telegraph
    “The Fed is in panic mode. The massive credibility chasms down which the Fed and maybe even the ECB will plummet when they fail to hike rates in the face of higher inflation will combine to give us a big sell-off in risky assets,” he said.

    Kit Jukes, RBS’s head of debt markets, said Europe would not be immune. “Economic weakness is spreading and the latest data on consumer demand and confidence are dire. The ECB is hell-bent on raising rates.

    “The political fall-out could be substantial as finance ministers from the weaker economies rail at the ECB. Wider spreads between the German Bunds and peripheral markets seem assured,” he said.

    Ultimately, the bank expects the oil price spike to subside as the more powerful force of debt deflation takes hold next year.

  4. george of sydney Says:

    Remember when rabuka did the coup, devaluation was the first thing that was done to sustain the economy. There was no plan to devalue our dollar in 2006 coup for the Qarase govt had put our economy in a very healthy state. This is because of the knowledge and experience he had and the fact that he respects his experts advice, it guided him into making the right decisions.
    This bunch of “want to be experts from the barracks and selfish politicians” such as Chodo are trying to convince the public that the Qarase govt failed to look after our economy and this was the reason they have to throw him out. Fuck you all. I dont know if Mr Chodo, Vore and Aiarse can match the qualification and experience in the field of economics as Qarase has. The highest financial position Chodo held in the govt was working in the auditor’s office. he was not even the Auditor General. This is why every second word that comes from his mouth had to be either investigation or corruption. If you will recall, he renovated his own house to be the same level as the PM residence at government expense saying that he didn’t want to move into the PM official residence. What about the 2million dollars from India in the name of Humanity? They want Qarase to be investigated for corruption and yet after 3 years they haven’t come up with a single proof that is to a level that justifies their action. How about the Qarase court decision which are now seems to be intentionally delayed. If I am correct, the Anti corruption unit is going into another round of investigating Qarase. Very soon I wont be surprised if they go that low into investigating the number of rats in Qarase’s house just to justify their illegal action.
    It will not also surprised me if the verdict of Qarase’s challenge in court will be delayed until they find some corruptive element in Qarase time as PM. This is because at the moment the ruling has to be in favour of Qarase but the judges are more worried about their job than upholding the rule of law (which should not be surprising).
    Now while the people are suffering because of the deteriorating of our economy, the famous Chodo and Vore’s response to the people is “Blame Qarase for if it wasn’t for their corruption and the need to clean it up, there wouldn’t have been a coup. TO VORE, CHODE AND ILLEGAL JUNTAS, TAKE YOUR ALLEGATIONS AND SHOVE IT UP YOUR ARSE.
    People, one thing to remember is that if our dollar value decreases, although our money in the foreign reserve will automatically rise, we will have to pay the price with a high cost of living. This is unavoidable and it is the negetive aspects of any devaluation of our dollar.
    At the moment the people are struggling to meet the money needed to sustain their life daily. Chodo and Vore and his free full chow army will have no problem with food and other essential supplies. Already the employees of public and private sectors have had reduction in wages and to be exposed to further increase in price of food and other necessities would be devastating.
    It would be interesting to hear of what is their bullshit excuse this time.
    As I always say “ONE DAY YOU WILL PAY”

  5. Tui Says:

    Vinaka Ratu Joji.
    I said in one of my earlier blogs this year that the RBF will have no option but to request the IG for the devaluation. The idiots running the show have slowly come back down to reality. They know now that they cannot fool the people of Fiji anymore. They are getting more and more desperate that they will resort to Mugabe’s antics judging from the LPC sham.
    What is so sad that Ului will stoop so low to even deny the boat passage for his people to go back home. If I was a Laun I’d say to hell with this family! Sa maumau wale na vakarokoroko taka tiko na tamata sega vua na loloma. Kakua ni vakalusia na nomuni gauna kei nai yau!
    Sa kaukauwa ga na turaga ni sa lomani ira na nona tamata. Sa kaukauwa na turaga ni sa nona vakanananu kei na na nona cakacaka na qaravi ira na nona tamata. Au sa krei kemuni na noqu tau mo ni vakasama taka sara vaka bibi.
    In all of my years in Suva, I have never seen the deplorable state of our roads as is the case today. I used to think that my place in Namadi would never suffer the same fate ass my tavale’s in Kinoya, Vuci and Wailoku. But look at our roads. The gravel roads on the kings highway are so much better. Even when things are getting worse, Budha and his hero chodo still blame Qarase. When people 4 patients died at the CWM hospital’s outpatients ward at night becasue there was no doctor in sight from 2 in the morning to 9 a:m, that is an indication that all is not well with the IG. This incident happened on Wednesday the 11 and hardly anything is mentioned in the media! I got this information from a patient who after his six hour wait was told to go home and take his panadol tablets. Any media people out there might like to investigate this further.
    I will say it again, Chodo will have no option but to devalue the dollar! He cannot hold back and keep fooling Fiji about how well the economy is doing. Today we will pay more fuel. Tommorrow more for FEA, food and bus fares.
    And I will reiterate this statement once again, THE IG WILL TAKE US TO THE STATE OF A FAILED STATE!
    Our nation will undergo a very chaotic and disastrous stage of which I’m afraid there will be more bloodshed. The oig and chodo have angered so many Fijians and hurt them beyond reproach, someone is bound to hit back any day now!
    And for f$%^k’s sake Minsister of Road and Transport take off your dark shades so you can see the potholes and fix the goddam road! Matailoilo ga ni dara fallu qori! Karua ga kei koya na mayor mai Nadi.
    Sa rauta mada na excuses dou yavu vakalusi gauna!
    Io sa dri yani, have a good one bloggers,bless.

  6. Mark Manning Says:

    Every dog has it’s day , as they say !
    Once the Democratically Elected Government is restored , not only must these people be held accountable for their treasonous acts but they and their extended families must have all their properties bought since the coup started , confiscated and sold so the money can be returned to the public of Fiji . A maximum security prison should be built or they should all be sent to another country to serve their time . As far away from Fiji as possible , then the military permanently disbanded !

  7. natewaprince Says:

    Now they say that all vacant senior posts in the civil service will be scrapped .The salaries for all these posts is $40 million per annum.Even though they are not paying out this sum ,they are counting it as savings.

    Levu ga na bullshit to make the snakes books look good.

    With todays most recent fuel hike,FEA will have no option but apply for an increase in their fuel surcharge.
    The snake also announced a 15% cut to USP’s budget.

    Desperate times call for desperate measures but this is bloody crazy.With this regime trying to conceal the real state of our economy,there will come a time when it will collapse completely with a mighty BANG!!!!

  8. natewaprince Says:

    And yet they keep gallivanting everywhere across the globe.

  9. Mark Manning Says:

    Any fool can save money , just stop spending it , don’t provide any services , reduce wages and sack public servants but don’t replace them . It’s a whole different thing to manage an economy !
    By reducing wages and sacking public servants , taxes are reduced also which must have the effect of reducing income for the Government to provide the services it has already reduced or with drawn !
    It’s like going in an ever decreasing circle until one finally disappears up ones own bottom !
    Wait , is that Chaudhry and Franks head sticking out ?

  10. Wailei Says:

    Io Dou qai chi’o i Suva, Au sa lesu i na noqu oro e sa dredre a bula i suva, Me voli ga e dua noku Solar system, ila ga electricity, a sele ‘ava, dua a sivi, ei na to’o.. lol…

    I hope this does not eventuate…. But if they are cutting off everyone’s pay, than the situation in Fiji is getting grimmer by the day. The IG is getting Desperate. Maybe the AUS, NZ and EU’s plan was to cripple Fiji’s Economy. Well, they are doing a GREAT JOB! Nice chain reaction.

    Wow! A Rise in unemployment which would contribute heavily on high crime rate. People will be starving unless they started planting veggies in their backyards now instead of going to the markets. A lot of business will be closing shortly, Lotsa people migrating. It appears The life in the village is going to appear sweeter than that of living in Suva. But one of the scenario’s is: people start to loose their jobs, starving, and suffering… what do you think will happen?

    A HUGE DEMONSTRATION BY THE PEOPLE… THIS IS WHEN THE GOVERNMENT AND THE MILITARY SHOULD BE SHIT SCARED!

    First of all: Its an explosion of peoples emotions of all the sufferings done to them by the IG and the military.

    Second: The military cant shoot a mass of people.. If they do it will be genocide. Plus they would not even think about killing their own relatives which would be many.

    This is when the saying goes:

    “People should not be afraid of the Government, It is the Government who should be afraid of its people”. Comes true.

  11. Jose Says:

    @ Wailei, by now you should know encouraging people to stand up in this blogg site won’t work. Not that I don’t agree with you but that this blogg doesn’t get to the wider community. Also there’s the probability that half the people here are blogging from overseas. For anyone passing through Fiji, it appears to them that life in Fiji goes on as normal. There doesn’t seem to be any happenings to indicate otherwise. To actually do something you’ve got to be in the country. Stir up some shit and you get whisked away. I was at the shopping centre in Mead Road one Saturday morning. As I was coming out, a truck load of, I assume govt security truck stopped about five yards away from me and out jumped about 6 men dressed in full gear wearing purplish khaki. I still don’t know what they were there for other then, at the cashier I had stood next to someone who I recognised from pictures as Shaista.

  12. Linus Says:

    @Jose. Couldn’t the Methodist Church connections be the best way to get that sort of message about a march or assembly passed quickley??

  13. Wailei Says:

    @ Jose… I know what you mean.. But… What I was trying to point out…

    There will come a time when people break. Not now but sometime in the feature. Im not encouraging anyone, it is just human nature.

    Everyone will vosota tiko qo and hoping that this coup will go away and back to elections. But the thing is there will be no elections next year. If the government is going make people suffer than they have to predict the outcome of the people’s suffering. I mean how long does it take to suppress the citizens of Fiji?? When you suppress something overtime it will eventually blow up. I mean if you look at History, The French revolution for example. Physics 101.

    As for the people in overseas blogging in they have a right too as every fortnight their monies are going to Fiji to help pay for costs with families here at home. Some of them are still citizens of Fiji. eg: British Army. E mosimosi vei ira beleta ni ra sauma tiko e rua na matavula:

    1. Their own families to feed
    2. Their parents back home and the other siblings.

  14. Save the Sheep Says:

    Great posts everybody and this for me has been the greatest worry all along.

    vakatakilai is spot on in my view. The consequences of this coup were bad enough but the long term prognosis is far worse as we see from all like Dictatorships.

    Can you imagine Fiji with 1000% Inflation aka Zimbabwe???

    God Bless Fiji.

  15. Budhau Says:

    Good Job Corruption Fighter – if you can keep up with stories such as this one, we can sure keep out a whole bunch of foreigner investors who just might be thinking about investing in Fiji.

    Save the Sheep – don’t worry about inflation, can you imagine having an election like Zimbabwe.

    Wailei – Good theory that is what NZ is hoping, that you kkep the pressure on the people and they will rise against the IG – the problem is that with the ensuing implosion things might get pretty messy.

    There must be a better way of getting out of this mess – no one might be happy with the final settlement, but alternative does not look too good.

    That being afraid of the government – they sure are scared – you start talking about a march in here today – tomorrow, some young chap in Fiji gets an invite to QEB – then what, we cancel the March – well maybe I should say we postpone the March.

    Jose – the blog site is here not to make a difference -it is here for the “feel good’ effect – you post a mean message in here and you feel good that you are doing you share, otherwise we might have a pretty frustrated bunch of folks – and such folks tend to do stupid things – this is like a pressure release valve. Good job SV, we need you.

  16. FijiGirl Says:

    BBC World service commented on the plummeting value of the Zimbabwean dollar, a prominent businessman said he needs to bring about 500 million Zimdollars cash to pay for a business lunch for himself and 1 guest.

    If Bainimugabe and Chodothru$h keep this up, our Fiji dollar will be worth about as much.

    God bless Fiji

  17. Jose Says:

    @ FijiGirl, try cashing your Fiji dollar at the National Bank in Aussieland. They have not accepted Fiji dollar since the coup.

    Bhudau, I’m only mean to you because you are such a subtle lying twister. And that’s putting it politely.

    @ Linus. They could and should. What have they done up to now? At times like this you get to know who the real deal is or are. Most of our chiefs are quiet too.

    @ Wailei. I wasn’t referring to the right of Fijian overseas dwellers to blog. Also the come a time when people will break issue I think is still a long way off. We are not in the same league as our fore-fathers. Mighty warriors. We are a new generation of God-fearing people. Not used to civil wars ready to kill our own. Try walking around Suva randomly choosing any one to talk to about it. The reticent reception you get is one of surrender to God committing all into His hands, “Sa da masu ga”. I think the mentality in Fiji was psyched out long ago in the planning for this illegal takeover. Just like NZ & Australia when they were test cases. NZers say “She’ll be right” The Aussies say” No worries, mate”

  18. Wailei Says:

    @ Jose ….Touché

  19. Kai Suva Says:

    Oil jumps above $140 on OPEC, Libya comments

    Jun 26 02:37 PM US/Eastern
    By JOHN WILEN
    AP Business Writer

    NEW YORK (AP) – Oil futures shot above $140 Thursday after OPEC’s president said oil prices could rise well above $150 a barrel this year and Libya said it may cut oil production.
    Light, sweet crude for August delivery rose as high as $140.05 in afternoon trading on the New York Mercantile Exchange before retreating slightly to trade up $5 at $139.55.

    Chakib Khelil, president of the Organization of the Petroleum Exporting Countries, said he believes oil prices could rise to between $150 and $170 a barrel this summer before declining later in the year. Khelil said he doesn’t think prices will reach $200 a barrel.

    Khelil joins a long list of forecasters who have made bold oil price predictions this year. Each new forecast—such as Goldman Sachs’ recent prediction that prices could rise as high as $200—causes a jump in prices as speculative buyers are drawn into the market.

    Meanwhile, the head of Libya’s national oil company said the country may cut crude production because the oil market is well supplied, according to news reports.

    “Shokri Ghanem, the nation’s top oil official, declined to say when a decision would be made on whether to lower production, or give any indication of the size of the cut under consideration,” said Addison Armstrong, director of market research at Tradition Energy in Stamford, Conn., in a research note.

    Oil’s move above $140 a barrel was the first for what’s known as a front-month crude contract, or the contract with the earliest expiration date. But it was not the August contract’s first foray above $140—August crude futures rose as high as $140.42 a barrel while July futures were still traded as the front-month crude contract. Many other later contracts have also traded above $140.

    The previous trading record for a front-month contract was $139.89, set by the July contract on June 16.
    http://www.breitbart.com/article.php?id=D91HU5I81&show_article=1

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