21 Jun 2011

Penalty for Solomons businesses which don't pass on effects of currency upgrade

1:29 pm on 21 June 2011

The Solomon Islands finance minister says businesses which fail to pass on the effects of the recent revaluing of the currency will be penalised.

Gordon Darcy Lilo says the five percent rise in the value of the country's dollar was the result of discussions with the International Monetary Fund and the country's Central Bank about how to combat inflationary pressures.

Mr Lilo says inflation was forecast to hit five percent by the end of the year but by the end of April it had already reached four precent.

He says people in rural parts of the country have suffered most from the rise in commodity prices and so they stand to benefit most from the dollar's appreciation.

"Authorities of the government can effectively enforce tools like price control to ensure that business houses must pass on the effects of the price reduction to the people. So we have already tasked the price control office to must do that."

Gordon Darcy Lilo says the weakness of the US dollar makes it timely to appreciate the Solomon Islands currency.