Wednesday, 23 May 2007 2:28 PM

Solomon Islands Foreign Reserves continue to rise

Solomon Islands' foreign reserves rose to SBD$902 million by mid may 2007 from SBD$790 million at the end of 2006.

The increase in foreign reserve also extends the period of import cover from 4.3 months to almost 6 months of import cover.

The Deputy Governor of Central Bank of Solomon Islands in his presentation to participants at a PINA workshop reported that recent development in the SI economy has reported positive outcomes. He told the participants that the GDP grew by 6.1% an increase of 1.1% over last years' growth of 5%. He said this is the fifth consecutive year in which the country has experienced positive economic growth.

He further explained that there is a mixed production in 2006 for real sector where there are increases in logs, fish, coconut oil and palm oil but decreases in copra and cocoa production.

The deputy governor gave three reasons for the growth in real sector, firstly Palm oil back after six years; High production volumes; Strong commodity prices.

All these growths the Deputy Governor said has amounted to the monetary sector experiencing upward trends in credit, money supply and liquidity. He said the most important aspect of current growth is the fact that government has gone from a net borrower to a net saver. He told participants that the government had been able to make SBD$39 million dollars through revenue collection.

However, the Deputy Governor has warned that increase liquidity may pose a problem when people choose to spend the money on consumable items and not on development projects.