Fiji’s foreign reserves remain strong, giving the local economy a safe buffer even as local families face high living costs, the Reserve Bank of Fiji (RBF) reported in its August economic review.
Foreign reserves stood at $3.9 billion as of August 31 this year, which is sufficient to cover 5.5 months of retained imports.
That money, the central bank stated was being held up by external Government loan drawdowns, strong tourism receipts and remittance inflows from families overseas.
“Foreign reserves are expected to remain adequate over the medium term,” the RBF stated.
The RBF also revealed that headline inflation had eased to 5.7 per cent in July from 6.1 per cent in June but remained well above the -1.5 per cent recorded a year earlier.
“The annual increase was driven primarily by higher prices in transport (1.8 percentage points), alcoholic beverages, tobacco and narcotics (1.7pp), food and non-alcoholic beverages (1.4pp), and housing and utilities (0.7pp).
“Inflation is expected to remain elevated in the coming months, reflecting the removal of the bus fare subsidy from September, the fading base effects of the August 2025 VAT rate reduction from the annual inflation calculation, and the continued pass-through of higher global fuel and freight costs to domestic prices.”
The RBF stated that while risks to the outlook remained tilted to the downside, added that heightened geopolitical tensions, trade frictions, and volatility in global energy markets could increase imported inflation, widen the trade deficit and place some strain on foreign reserves.
“The RBF will continue to closely monitor global and domestic developments and stand ready to adjust its policy settings as needed to maintain price stability and protect the adequacy of foreign reserves,” the central bank stated.
