Press Release No. : 26/2024
Date : 31 October 2024
Press Release No 26 – Monetary Policy Stance Maintained
The Reserve Bank of Fiji (RBF) Board maintained the Overnight Policy Rate at 0.25 percent at its meeting on 31 October.
The Governor and Board Chairman, Mr Ariff Ali, indicated that the growth momentum within the domestic economy continues to strengthen, primarily driven by tourism performance that has surpassed expectations and is positively influencing related industries. Total visitor arrivals are on track to register a new annual record, with international arrivals trending relatively higher and registering an annual growth of 6.3 percent (732,865 visitors) in the year to September 2024. Visitor numbers continued to increase from key markets including Australia, the United States and New Zealand.
Production levels for gold, electricity, sawn timber, and woodchips have also improved further, although certain sectors continue to experience specific challenges. Indicators of consumption spending remain firm, supported by improved incomes, growth in inward remittances and heightened tourism-related consumption expenditures. Investment activity is gradually picking up, and government expenditure on both capital and operations has steadily increased in the year to September when compared to the same period in 2023, supporting overall economic growth. Based on the performance of various partial indicators so far in the year, economic growth for 2024 is anticipated to exceed earlier projections.
According to the RBF’s August Business Expectations Survey results, most businesses anticipate general business conditions to remain stable over the next six months, with further improvements anticipated in the subsequent twelve months. Positive sentiments were also expressed regarding retail sales, with expectations of improved sales in both the current and forthcoming year.
Financial conditions remain conducive to growth with high banking system liquidity of $2.4 billion (30/10) and near historical-low lending rates. Commercial banks registered an increase in lending driven by higher demand for credit from both new and existing customers, resulting in double-digit growth in private sector credit since May.
With regard to the RBF’s twin monetary policy objectives, the annual headline inflation rate stood at 4.2 percent in September, higher than the 2.5 percent noted in September last year. The major contributors to this price increase were food and non-alcoholic beverages, as well as alcoholic beverages, tobacco & narcotics categories. Nevertheless, the trend in inflation has moderated since July following a significant 6.8 percent annual increase in prices. Foreign reserves continue to remain sufficient, currently above $3.8 billion, covering around 6.3 months of retained imports of goods and services, and are projected to remain adequate over the medium term.
The RBF will continue to monitor incoming information and its implications on the outlook for inflation and foreign reserves and adjust monetary policy as necessary.
RESERVE BANK OF FIJI
For further details, please contact: –
Communications Office
Telephone: (679) 3223 381 Email: info@rbf.gov.fj
Mervin Singh – Manager Corporate Communications
Telephone: (679) 3223 229 Email: mervin@rbf.gov.fj