Press Release No. : 06/2025
Date : 24 April 2025
Press Release No 06 – RBF Maintains Overnight Policy Rate
The Reserve Bank of Fiji (RBF) Board maintained the Overnight Policy Rate at 0.25 percent at its meeting on 24 April.
The Governor and Chairman of the Board, Mr Ariff Ali, stated that the RBF’s monetary policy objectives of stable inflation and adequate foreign reserves remain intact. Annual inflation has eased to 1.5 percent in March from the annual average rate of 4.5 percent noted last year. Inflation is likely to moderate further in the coming months as Fiji exits the cyclone season, barring any major domestic and global shocks. Foreign reserves stood at $3.5 billion on 24 April, equivalent to 5.6 months of retained imports of goods and services and are projected to remain adequate in the medium term.
Domestically, while partial indicators for sectoral, consumption and investment indicators were generally positive, visitor arrivals fell for a second consecutive month in March, resulting in a 5.3 percent contraction in the first quarter of 2025. Lower arrivals from Fiji’s key source markets, Australia (-8.5%) and New Zealand (-14.1%), more than offset the increased visitors from Pacific Island Countries (22.7%) and the United States (US) (8.2%). The resource based sectors noted better annual performances, particularly for mineral water, sawn timber, and woodchip production in the year to March. Positive consumption activity continued in the review period, which was evident in increased VAT collections and new consumption loans amid higher incomes and remittance inflows. Investment indicators such as rise in commercial banks’ new loans to the building and construction sector reveal some gradual improvement in activity; however, the prevailing high cost of doing business continues to weigh on the growth momentum. Indicators also suggest that the labour market has stabilised somewhat with the import of labour and a decline in resident departures. Overall, the latest RBF’s Business Expectations and Retail Sales Survey (February 2025) results reveal that although lower than the previous survey, on net, sentiments on general business conditions continue to be optimistic.
Governor Ali added that the banking sector is still supportive of growth. Ample system liquidity of $1.9 billion (23/04) and near-historical low lending rates have aided the strong growth in private sector credit, which expanded by 11.0 percent in March.
He further acknowledged that the ongoing global trade tensions, largely between the US and China are reshaping trade relationships and could impact trading partner economies, including Fiji. As a result of the current tariff wars and increased uncertainty, the International Monetary Fund, in its April 2025 World Economic Outlook report has revised its global growth outlook for 2025 down to 2.8 percent from 3.3 percent.
The RBF will continue to track domestic and global developments and align monetary policy accordingly.
RESERVE BANK OF FIJI
For further details, please contact:-
Communications Office
Telephone: (679) 3223 381 Email: info@rbf.gov.fj
Mr Mervin Singh – Manager Corporate Communications
Telephone: (679) 3223 229 Email: mervin@rbf.gov.fj