Press Release No 20 –
Monetary Policy Stance Unchanged
Press Release No. : 20/2018
Date : 25 October 2018
The Reserve Bank of Fiji (RBF) Board in its monthly meeting on 25 October maintained the Overnight Policy Rate at 0.5 percent.
The Governor and Chairman of the Board, Mr Ariff Ali highlighted that the decision to maintain the policy rate was based on the receding outlook for inflation, adequate foreign reserves and current economic conditions. Domestic economic activity continues to be supported by robust demand, as reflected in partial indicators for consumption and investment including net Value Added Tax collections, vehicle registrations and new commercial bank lending.
Inflation was 4.6 percent in September compared to 4.3 percent in August. Governor Ali explained that the uptick in inflation as largely due to supply shortages that droe kaa and egetale prices up relative to last year, along with higher prices for alcohol, tobacco, and domestic fuel which rose as a result of duty changes and international fuel price adjustments. Nevertheless, inflation is anticipated to subside to 3.5 percent in 2019 and 3.0 percent in 2020.
Foreign reserves stood at around $2,138.5 million as at 25 October, sufficient to cover 4.9 months of retained imports of goods and non-factor services. Barring any major shocks, particularly on the crude oil prices front, foreign reserves are expected to be adequate at the end of 2018 and remain at comfortable levels in 2019-20.
The RBF will continue to monitor international and domestic developments and align monetary policy accordingly nless threats to the B’s dual mandate emerge the current accommodatie monetary policy stance will remain.