At its meeting today, the Reserve Bank of Fiji (RBF) Board decided to maintain the Overnight Policy Rate at 0.25 percent.
The Governor and Board Chairman Mr Ariff Ali stated that economic activity last year was largely attributed to the remarkable performance of the tourism industry and its rippling positive effects on other related sectors. Visitor arrivals1 rose by 5.7 percent in 2024, setting a new record high of 982,938 visitors, with Australian tourists dominating the outcome followed by arrivals from the United States and New Zealand.
The performance of the resource-based sectors was generally positive despite industry-specific challenges with gold, sawn timber and woodchips output noting gains in 2024. Consumption activity remained resilient, supported by tourist demand, higher household incomes and inward remittances. Partial indicators suggest some improvement in investment activity backed by an increase in imported labour supply and a deceleration in building material prices noted towards the latter part of last year.
The Chairman added that the financial sector remained supportive of domestic growth. Private sector credit which rose by 11.4 percent was aided by the ample banking system liquidity of around $2.2 billion (as of 29 January) and the historical-low lending rates.
On the RBF’s twin monetary policy objectives, the annual headline inflation rate was 1.3 percent in December 2024 (from 5.1% in December 2023). The impact of the 2023 VAT rate hike fell off calculations in the second half of 2024, partly resulting in a decline in prices in the transport, housing & utilities and restaurants & hotels categories with some price moderation noted in food and non-alcoholic beverages. Additionally foreign reserves (30/01) stand at around $3.7 billion, adequate to cover 5.9 months of retained imports of goods and services and are projected to remain sufficient over the medium term.
The RBF will continue to monitor global and domestic developments and their implications on the twin objectives and adjust 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
