Drought, the Asian crisis and Fiji's monetary policy response

The effects of the El Niño-driven drought and the Asian crisis on Fiji are investigated showing Fiji as highly vulnerable to natural disasters. While domestic factors were largely responsible for Fiji's 1997 recession, the lagged effects of 1997's economic weakness and the drought were largely responsible for the 1998 recession. The devaluation of the currency in January 1998 was the major monetary policy response to the weakening domestic economy and the Asian crisis. Fiji's early interventions in terms of policy adjustments helped cushion the economy from the worst effects of the drought and the Asian crisis.