The International Monetary Fund has commended the Central Bank of the Solomon Islands for its “appropriate” monetary policy stance this month, but raised concerns over the high inflation and overvalued Solomon Islands currency.
In September 2013, the Central Bank board resolved to “maintain the current moderate contractionary monetary policy stance over the next six months”.
In its Article Four consultation with Solomon Islands, the IMF deemed this an “appropriate” stance.
Although annual inflation is “high relative to the rest of the region”, it dropped from eight-point-three per cent in June 2012, to five-point-two per cent in June 2013.
Also, according to the IMF’s Article Four consultation, Solomon Islands authorities see the Bokolo bills as “their most flexible tool of monetary policy” and they to plan develop the instrument by introducing new maturities.