The Reserve Bank of Fiji (RBF) has decided to maintain the overnight policy rate at 0.25 percent, a decision grounded in the current assessment of its monetary policy objectives, inflation, and the status of foreign reserves. Governor Ariff Ali indicated that inflation increased to 4.0 percent in January 2025, primarily due to one-off price hikes in local market crops and vegetables following significant flooding in December.
As of now, Fiji’s foreign reserves stand at approximately $3.6 billion, which is adequate to cover 5.8 months of imports for goods and services. Ali expressed optimism, projecting that inflation will ease in the upcoming months and that foreign reserves will stay at satisfactory levels in the medium term.
The banking sector continues to show strong support for economic growth with system liquidity recorded at $2.1 billion and historical low lending rates. This favorable environment contributed to a notable 11.8 percent growth in private sector credit in January.
While acknowledging the domestic challenges and external risks that could influence the economic outlook—such as rising geopolitical tensions and increased trade tariffs—Ali highlighted that the economy might benefit from competitive import prices as goods are redirected from high-tariff countries. However, he also noted that higher costs in the U.S. could hinder demand for Fijian exports.
The RBF remains vigilant in monitoring both local and global economic trends to adjust its monetary policy as necessary, aiming to stabilize the economy while fostering growth.
The ongoing commitment of the RBF to support financial stability offers a hopeful perspective for the economic resilience and prospects of Fiji, emphasizing the importance of adaptive policy-making in response to emerging challenges.
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