15 Aug 2012

Samoa Central Bank says devaluation no export panacea

2:32 pm on 15 August 2012

The Governor of Samoa's Central Bank says devaluing the currency is not the answer to the country's poor export performance.

The executive directors of the International Monetary Fund have recommended a gradual realignment of the exchange rate to prevent further losses in foreign reserves and to strengthen export competitiveness.

They say the tala has appreciated substantially in real terms over the past decade and is assessed to be overvalued.

The Governor, Atalina Enari, says it is structural issues holding back the export sector, not the exchange rate.

"In order to boost the export sector from its long term slump right now, we need to really look at the implementation of our agriculture sector plan and other recently launched initiatives such as the development of exports for the New Zealand, Australian and Chinese markets. This is timely at the moment."

Atalina Enari says Samoa's external reserves are still at a comfortable level.