The Reserve Bank of Fiji (RBF) has decided to maintain the overnight policy rate at 0.25 percent, a decision based on current evaluations of its monetary policy goals, inflation trends, and the status of foreign reserves. Governor Ariff Ali noted that inflation has risen to 4.0 percent in January 2025, largely due to temporary price increases in local crops and vegetables following significant flooding in December.
Currently, Fiji’s foreign reserves are approximately $3.6 billion, sufficient to cover imports for 5.8 months. Ali expressed optimism, forecasting a decline in inflation in the coming months and stability in foreign reserves in the medium term.
The banking sector continues to support economic growth, with system liquidity reaching $2.1 billion and lending rates at historical lows. This favorable climate has led to an impressive 11.8 percent growth in private sector credit this January.
Despite recognizing domestic challenges and external risks like rising geopolitical tensions and increased trade tariffs, Ali pointed out that the economy could benefit from competitive import prices as sourcing shifts from high-tariff countries. However, he cautioned that rising costs in the U.S. might dampen demand for Fijian exports.
The RBF remains proactive in monitoring local and global economic developments to adjust its monetary policy when necessary, aiming to balance economic stabilization with growth promotion.
The RBF’s ongoing commitment to fostering financial stability provides a promising outlook for Fiji’s economic resilience and future prospects, highlighting the significance of adaptable policy-making amidst evolving challenges.
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