RBF maintains monetary policy stance

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Reserve Bank of Fiji. Picture: ELIKI NUKUTABU

The Reserve Bank of Fiji has maintained the overnight policy rate at 0.25 per cent as it credits the comfortable outlook for foreign reserves and inflation.

And while the RBF board has decided to continue the accommodative monetary stance, it will continue to diligently monitor economic developments and align policy as needed.

The annual headline inflation rate fell to 3.6 per cent in January this year from 5.1 per cent noted in December 2023.

Despite any major commodity price shocks, it is forecast to fall to 3.0 per cent by year-end. Foreign reserves were around $3.2billion as at February 29, sufficient to cover 5.1 months of retained imports of goods and services.

RBF governor Ariff Ali said that was expected to remain within the adequate range over the medium term.

Mr Ali said credit to the private sector expanded by 8.5 per cent in January, while liquidity in the banking system was $1,951.1m as at February 28, “helping keep lending rates around historical lows and supporting economic activity”.

He noted visitor arrivals data was higher than expected in January as Fiji received 70,324 visitors – 4.2 per cent higher than January 2023.

However, he said arrivals from main source market Australia was lower for the second consecutive month compared with the same month a year ago.

“The labour market has noted continuous increase in job advertisements and wages have risen, reflecting higher emigration,” Mr Ali said.

“Consequently, personal remittances in January 2024 was around the same level as January 2023 after reaching a new record of $1.25billion last year.”

The RBF is also closely monitoring weak growth in major trading partners.

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