Press Release No. : 05/2025
Date : 27 March 2025
Press Release No 05 – RBF Monetary Policy Rate Unchanged
The Reserve Bank of Fiji (RBF) Board maintained the Overnight Policy Rate (OPR) at 0.25 percent at its meeting on 27 March.
The Governor and Board Chairman, Mr Ariff Ali, stated that the twin monetary policy objectives, inflation and foreign reserves, remains comfortable, underlining this month’s monetary policy decision. Annual inflation has eased to 1.4 percent in February, primarily driven by the moderation in vegetable prices following the December 2024 flood-related impacts observed in January’s inflation rate of 4.0 percent. Foreign reserves currently (27/03) stand at $3.5 billion, adequate to cover 5.6 months of retained imports of goods and services and are projected to remain sufficient over the medium term.
On developments in the Fijian economy, the tourism industry saw a slow start in the first two months of 2025, with visitor arrivals declining by 3.8 percent annually. Notable lower arrivals from Fiji’s key source markets, Australia (-3.3%) and New Zealand (-12.8%), more than offset the strong growth in visitors from Pacific Island Countries (18.6%). Nevertheless, partial indicators suggest that the performance of resource-based sectors and aggregate demand has broadly been favourable up to February. Positive consumption activity, evident in high domestic VAT collections and double-digit expansion in new consumption-related loans, continues to be supported by inward remittances and higher incomes. Investment indicators such as commercial banks’ new loans for investment purposes, and building permits issued, signal an improvement in activity.
The Chairman added that banking system liquidity ($1.9b as of 26/03) remains ample in line with the maintained OPR decision, which will help keep interest rates low and support economic activity.
Mr Ali acknowledged that while the economy is projected to grow for the fourth consecutive year supported by several sectors and strong pipeline of investments, the spillovers from the increased trade frictions and higher global inflation could pose a drag on potential growth.
The RBF will continue to assess incoming information and its implications on the outlook for inflation and foreign reserves and review monetary policy accordingly at its next Board meeting on 24 April 2025.
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