SUVA, Sept. 24 (Xinhua) -- Fiji said on Thursday that it has adequate foreign reserves that can cover 8.5 months of retained imports of goods and services.

According to a statement released by the Reserve Bank of Fiji (RBF), foreign reserves in the island nation are now adequate at 2,338.3 million Fijian dollars (about 1,090.3 million U.S. dollars), sufficient to cover 8.5 months of retained imports of goods and services and anticipated to remain at comfortable levels in the medium term.

The central bank also said the country's annual inflation slid further to -3.0 percent in August from -1.6 percent in July, primarily influenced by lower prices of alcoholic beverages, kava (a Fijian traditional drink), food and fuel.

RBF Governor Ariff Ali said that the outlook for the central bank's twin monetary objectives of low inflation and adequate foreign reserves is intact, although the extended border closure remains a key downside risk for domestic economic recovery going forward.

According to the RBF, Fiji's economy is expected to contract by 21.7 percent in 2020 mainly due to poor tourism activity and its knock-on effects on the rest of the economy. This will be the most severe contraction in the island nation's history. Enditem

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