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Why is interest rate spread high in Fiji? Results from a preliminary study

Jayaraman, Tiruvalangadu K. and Sharma, R. (2003) Why is interest rate spread high in Fiji? Results from a preliminary study. Fijian Studies: A Journal of Contemporary Fiji, 1 (1). pp. 75-104. ISSN 1728-7456

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Interest rate spreads (IRS) have been observed to be relatively high in the Fiji and other Pacific Island Countries (PICs) when compared to the ones prevailing in developed countries. The chief reason behind high IRS in PICs has been argued to be the presence of high intermediation costs, reflecting the weaknesses and inadequacies of their financial sectors. Despite the ongoing financial sector reforms, which are aimed at enhancing competition, the spread, instead of narrowing down, has been either stagnant or growing. This paper examines the factors behind the high IRS spread in Fiji. Based on data released under the mandatory annual disclosure statements of commercial banks required under the Banking Act 1995, the paper examines the trends of IRS from 1999 to 2002, and advances reasons for the high spread.

Item Type: Journal Article
Subjects: H Social Sciences > HG Finance
Divisions: Faculty of Business and Economics (FBE) > School of Economics
Depositing User: Ms Mereoni Camailakeba
Date Deposited: 23 Apr 2003 06:05
Last Modified: 04 May 2012 03:03

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