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Implications of excess liquidity in Fiji’s banking system: an empirical study

Jayaraman, Tiruvalangadu K. and Choong, C.K. (2012) Implications of excess liquidity in Fiji’s banking system: an empirical study. School of Economics, the University of the South Pacific, Suva, Fiji.

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Abstract

The reasons behind the frequent occurrences of excess liquidity, especially in the recent months since 2007, are well known and documented. They include low investor confidence following the military coups and related political uncertainties with their lingering effects for a while. What are unknown and not studied in detail are the long term effects of excess liquidity on various key economic variables. Utilizing the VAR methodology, this paper examines the effects of excess liquidity on loans, lending rate, exchange rate and price level. The findings are that excess liquidity is a major component of forecast variation in loans, exchange rate and lending rate.

Item Type: Other
Subjects: H Social Sciences > HG Finance
Divisions: Faculty of Business and Economics (FBE) > School of Economics
Depositing User: Ms Shalni Sanjana
Date Deposited: 23 Jan 2013 00:56
Last Modified: 31 Jul 2016 22:54
URI: https://repository.usp.ac.fj/id/eprint/5328

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