The Reserve Bank of Fiji (RBF) board has again kept the Overnight Policy Rate (OPR) at 0.25 per cent for the fourth consecutive year running, directly keeping the lid on interest rates, which have remained at “historic lows”.

OPR influences the prevailing interest rates offered by commercial banks and the RBF had reduced it to 0.25 per cent in March 2020 from the previous 0.5 per cent.

“The accommodative monetary policy stance is appropriate given the downward revision to the 2024 growth forecast,” the central bank said in a statement.

Commercial banks’ new lending for investment purposes rose by 33.7 per cent annually cumulative to October driven by higher lending to the real estate, building and construction and to households for home investments.

However, it did little to dampen liquidity, which has remained at over $2billion throughout the year and led to outstanding lending rates falling to historical low of 4.9 per cent in October.

On RBF’s twin monetary policy objectives, annual headline inflation was 5.8 per cent in November as higher prices were recorded across most categories with year-end inflation projected to be around 6.0 per cent.

Annual average inflation, however, is expected to moderate to around 3.6 percent in 2024, RBF said.

Foreign reserves as of December 6 stood at around $3.4billion, sufficient to cover 5.7 months of retained imports of goods and services and are projected to remain adequate over the medium term.