Central Bank Governor Denton Rarawa. Photo credit: SIBC.

Central Bank Governor Denton Rarawa. Photo credit: SIBC.

The Central Bank of Solomon Islands has made a public clarification on why the Bank is facilitating a Relationship Management Agreement for the country’s newest commercial bank, the Pan Oceanic Bank and another bank in the Asian region.

Speaking yesterday at a media conference in Honiara, CBSI Governor Denton Rarawa said the CBSI is doing this because it has a responsibility to ensure stability in the country’s financial system.

“You may ask why are we doing this? I think the Central Bank has a responsibility to ensure that the Solomon Islands financial system is stable, with inflows and outflows not disrupted. That is why we have an interest in ensuring that we facilitate smooth flows through the financial system, as I said once RMA arrangements are established and sorted out with this particular case then we will discontinue our involvement in the process.”

The CBSI Governor also said discrediting financial institutions in the country should not be discouraged.

“I am also aware that there are some moves to discredit some of the institutions in the country but I think in our interest to ensure that the financial system is stable so we should not do this kind of thing.”

Meanwhile, the Central Bank Governor says the government is now looking at tourism as a potential source of economic activity for the country following its 20-year dependency on the forestry sector.

Denton Rarawa said neighbouring countries are benefiting from tourism and the country’s dependency on the forestry sector is a risk to the economy.

“In the last 20 years we have been so dependent on the forestry sector, so in the case of something like this happening, it creates instability in the economy and that’s not good, so the ideal situation is we diversify the economic base so that other commodities or other sectors also contribute and not only the mining or logging or fishing. Government is now looking at tourism for example. In other countries, our neighbours are benefiting from tourism much more than us, but that is one potential source of revenue or economic activity for our country.”

Meanwhile, the Central Bank Governor says the challenge is to make the economic potential of tourism tangible.

“But it’s one thing saying that it’s a potential source and actually making it happen to contribute to the economy, so I think that’s where the challenge is, actually implementing what the government said or the political parties say they will do, implementing it so that we realize the benefits, otherwise we will always talk about the benefits.”

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