The Reserve Bank of Fiji Board has agreed to maintain the overnight policy rate at 0.25 percent.
Governor and Board Chair Ariff Ali, states that the decision was mainly based on the RBF’s current assessment of its monetary policy objectives, inflation and foreign reserves, remaining within comfortable levels.
Ali says that annual headline inflation rose to 4.0 percent in January 2025 led by one-off increases in prices of local market crops and vegetables owing to the December flooding in the western division.
He adds that foreign reserves are around $3.6 billion, sufficient to cover 5.8 months of retained imports of goods and services.
Looking ahead, the RBF expects inflation to moderate in the coming months with foreign reserves projected to remain adequate over the medium term.
The Board Chair adds that the banking sector remains supportive of growth with ample system liquidity of $2.1 billion and lending rates at near historical lows.
He adds given this conducive environment, private sector credit grew by 11.8 percent in January.
Ali acknowledges the ongoing domestic challenges and emerging external risks to the outlook, particularly the potential effects of rising geopolitical uncertainty, increased trade tariffs and their impact on global activity and Fiji’s trading partners.
He adds that the economy could benefit from competitive import prices on goods redirected from countries with higher tariffs to the rest of the world.
Ali says at the same time, a higher-cost environment in the US could dampen demand for Fijian exports.
The RBF will continue to closely monitor global and domestic developments and review monetary policy accordingly.
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