Fiji Fallout

Well, the coup in Fiji is having an unpleasant effect on Australians (and others as well) who have canceled vacations to the popular tourist destination. The government bank there is capping refunds to people who have decided they really don't want to visit under the circumstances. There will be a limit of $500 on all refunds, no matter how much was paid in advance. Fiji's finances appear to be in a bit of trouble at the moment.

FIJI'S Reserve Bank has decided against devaluing the country's currency in response to last week's coup and will instead strictly control foreign currency flows, including imposing a $500 cap on the refunds of holiday deposits for Australians who have cancelled their travel plans.

The decision comes as the implications of last week's coup continue to resonate, with the Commonwealth suspending Fiji's membership on Friday.

Reserve Bank of Fiji Deputy Governor Sada Reddy is due to meet Fiji's military leader, Frank Bainimarama, today to brief him on the nation's finances. It is believed Fiji has enough foreign reserves to meet its commitments for about four months.

The Australian understands the central banker will recommend not devaluing the currency, as experience has shown only a short-term benefit to the country.

The Fijian dollar was devalued by 33 per cent after the country's first coup in 1987 and again by 20per cent in 1998. The Fijian dollar is currently worth 76c.

The military is still hunting the country's finance department chief executive, Paula Uluinaceva, who froze the military's accounts and put spending limits on government departments as a precaution against a junta raiding the nation's bank accounts.

What happens in four months is another question. Maybe they will run more help wanted ads. This coup seems to have been rather badly thought through from the start, doesn't it?