The Reserve Bank of Fiji

The Reserve Bank of Fiji Board has kept the Overnight Policy Rate at 0.25 percent.

Governor Ariff Ali, says the current monetary policy stance remains supportive of the 2.8 percent growth envisaged for this year.

He says sectoral performance has been mixed.

While visitor arrivals cumulative to May grew by 8.3 percent, more than twice the rate forecast for the whole year, resource-based sectors, except gold and electricity, have recorded weak outcomes so far into the year.

Ali adds the financial system remains stable and conducive to economic activity.

He adds banking system liquidity is ample as at Wednesday at $1.9b, keeping lending rates low, thereby supporting the expansion in private sector credit until May at 9.4 percent.

On the RBF’s twin monetary policy objectives, says annual headline inflation rate slowed to 5.8 percent in May after reaching a decade-high of 7.1 percent the month prior, as prices of food & non-alcoholic beverages declined in May.

However, Ali says the outlook could be impacted by global geopolitical tensions, commodity price shocks and the current soft growth in most of Fiji’s major trading partners.

Domestically, adverse weather conditions and structural and capacity constraints remain risks to the outlook.

Amid a stable medium-term outlook for inflation and foreign reserves, Ali adds monetary policy stance will be maintained for now to support Fiji’s economy.