Overseas Exchange Transactions

December 2017

Released on 19 March 2018 | Download the complete release |  300 KB

Higher import payments leads to deficit in overall balance

Total OET Receipts

In December 2017, the total Overseas Exchange Transaction (OET) receipts rose by $14.2 million (25.89%) to $69.3 million. This was attributed mainly to higher remittances and private capital transfer receipts. In addition, financial account receipts, travel receipts and non-profit transfer receipts increased. In year ended terms, the total OET receipts rose by $19.1 million (2.6%) to $746.8 million driven by higher inflows of private remittance and travel receipts.

The US dollar (USD) remained as the dominant currency in OET receipts with a share of 47% of the total OET receipts, compared to 45% in November 2017. The receipts in Australian dollar (AUD) and New Zealand dollar (NZD) followed with a share of 19% and 17% respectively, compared to a share of 26% and 14% in the previous month. The rise in the OET share of the New Zealand dollars (NZD) was coincided with the strengthening of the New Zealand dollar (NZD) against the Tongan Pa’anga (TOP).

Current Account Receipts

In December 2017, current account receipts slightly rose by $3.0 million (6.1%) to $51.7 million. This was mainly driven by higher private remittances, supported by higher travel and non-profit transfer receipts. In year ended terms, current account receipts rose by $29.4 million (5.0%) to $616.0 million, driven mainly by higher private transfer and travel receipts. Current account receipts accounted for 75% of the total OET receipts in December 2017.

Service receipts rose over the month by $2.6 million (24.0%) to $13.3 million. This was driven by a $3.2 million rise in travel receipts particularly personal travels. The receipts from other services however declined, particularly telecommunication services. Over the year, service receipts rose by $20.3 million (12.7%) to $180.1 million, of which 62.7% were from travel receipts and the remaining 37.3% were from the other services.

Transfer receipts also rose by $2.0 million (6.0%) to $35.8 million. Both private and non-profit transfer receipts rose over the month by $5.7 million and $3.2 million respectively. Higher private remittance receipts were mostly family supports during the Christmas & festive season whereas receipts for non-profit organisations were mostly assistance for schools and churches. Official transfer receipts on the other hand, fell by $5.7 million mainly Government grants. Transfer receipts accounted for 52% of the total OET receipts. In year ended terms, total transfer receipts rose by $12.6 million (3.3%) to $396.4 million, driven by higher private transfers, particularly receipts for family support.

Primary income receipts slightly rose by $0.2 million over the month, due mainly to higher receipts of wages of residents working overseas. In year ended terms, receipts fell by $4.4 million due to lower receipts of wages of residents working overseas.

On the other hand, the export proceeds declined over the month by $1.8 million, due mainly to lower receipts from agricultural exports, indicating the end of squash season. Other export proceeds supported the trend while marine export proceeds was slightly increase over the month. Over the year, the total export proceeds slightly rose by $0.9 million, mainly other exports.

Financial Account & Capital Account Receipts

Both Financial account receipts and Capital account receipts rose over the month of December 2017 by $3.9 million and $7.3 million respectively. Higher interbank transfers drove the rise in financial account while higher private grants for investment projects or capital expenditures drove the increase in capital account receipts. These bring out a total of $7.9 million for the financial account and $9.7 million for the capital account. In year ended terms, financial account receipts declined by $32.1 million to $83.9 million while the receipts on the capital account rose by $21.8 million to $47.0 million.

Total OET Payments

In December 2017, the total OET payments rose by $10.9 million (20.6%) to $63.7 million, primarily due to import payments. In year ended term, total OET payments rose by $69.0 million (11.3%) to $679.7 million, again driven by higher import payments, particularly for wholesale & retail goods.

The USD remained the top currency for OET payments, despite the decline in its share from 58% in November to 53% this month. The payments in NZD and FJD followed with a share of 25% and 11% respectively.

Current Account Payments

Current account payments rose over the month by $9.0 million (18.0%) to $58.9 million, driven mainly by higher import payments and supported also by the slight increase in service receipts. Both primary income payments and transfer payments declined over the month. Over the year, the total current account payments rose by $69.0 million (11.3%) to $679.7 million, due to higher import and primary income payments. Current account payments accounted for 92.9% of the total OET payments.

Total import payments rose by $10.8 million from $26.5 million last month to $37.3 million. All categories of import payments rose with wholesale & retail goods payments rose the most by $5.8 million. Payments for imports of oil followed with a rise of $3.8 million and Government import payments also rose by $0.8 million. Both construction and motor vehicle imports rose by $0.2 million and $0.1 million respectively. Over the year, total import payments rose by $43.7 million to $388.7 million, driven mainly by higher wholesale & retail import payments which rose by $76.0 million. This coincided with the rise in container registrations over the year by 13.3%.

Service payments slightly rose over the month by $2.8 million to $15.8 million, reflecting higher payments of professional, management consulting and other business services. In year ended terms, service payments rose by 7.7% to $147.4 million due to higher sea freight payments.

On the other hand, transfer payments declined by $4.0 million (42.3%) to $5.4 million. Both official and non-profit transfer payments fell by $4.1 million and $0.1 million respectively while private payments slightly rose over the month by $0.2 million. In year ended terms, total transfer payments declined by $3.3 million, due to lower private transfer payments particularly gifts sent to families and relatives abroad. This outweighed the higher official and non-profit transfer payments.

Primary income payments slightly fell by $0.6 million over the month however rose by $10.9 million (44.9%) to $35.1 million in year ended terms. Payments of dividend explained both the monthly and yearly movements.

Capital & Financial Account Payments

Financial account payments for the month of December 2017 slightly fell by $0.3 million to $2.3 million, mainly due to lower direct investment payments. Other investment payments on the other hand slightly rose by $0.7 million while portfolio investment continued to record no payments in December 2017. Capital account payments rose over the month by $2.2 million due to rise in private capital transfer payments whereas official capital transfer payments continued to record no payments. Over the year to December 2017, financial account payments rose by $6.6 million to $45.4 million and capital account payments slightly rose by $0.6 million to $3.2 million.

Overall Balance & Foreign Reserves

The balance of Overseas Exchange Transactions recorded a deficit of $2.3 million for the month of December 2017, declining from a surplus of $11.2 million in November 2017. This contributed to the decline in the official foreign reserves to $422.5 million in December 2017, sufficient to cover 7.7¹ months of imports, which is well above the Reserve Bank’s minimum range of 3-4 months of imports.

The foreign reserves is anticipated to remain comfortably above the minimum range of 3 – 4 months of imports cover, supported by expected higher receipts of remittance and anticipated Government receipts of budget support and grant funds from development partners. This will be partly offset by the projected rise in import payments.

1 - Method of calculation changed in February 2017 to include imports of both goods and services (previous method used imports of goods only).

Overseas Exchange Transactions Releases

• Overseas Exchange Transactions Releases for 2017
• 2016
• 2015
• 2014

Overseas Exchange Transactions Releases for 2017

	December Released on 19 March 2018 | 300 KB		November Released on 2 February 2018 | 285 KB
	October Released on 25 January 2018 | 272 KB		September Released on 27 December 2017 | 476 KB
	August Released on 27 November 2017 | 458 KB		July Released on 16 October 2017 | 264 KB
	June Released on 16 October 2017 | 259 KB		May Released on 15 August 2017 | 262 KB
	April Released on 10 July 2017 | 268 KB		March Released on 28 June 2017 | 270 KB
	February Released on 28 June 2017 | 367 KB		January Released on 21 June 2017 | 307 KB

2016

	December Released on 21 June 2017 | 314 KB		November Released on 21 June 2017 | 303 KB
	October Released on 3 April 2017| 479 KB		September Released on 28 March 2017| 493 KB
	August Released on 14 February 2017| 492 KB		July Released on 9 November 2016 | 467 KB
	June Released on 5 September 2016 | 630 KB		May Released on 10 August 2016 | 615 KB
	April Released on 30 June 2016 | 617 KB		March Released on 7 June 2016 | 613 KB
	February Released on 17 May 2016 | 634 KB		January Released on 10 May 2016 | 621 KB

2015

	December Released on 22 April 2016 | 670 KB		November Released on 22 April 2016 | 658 KB
	October Released on 29 January 2016 | 494 KB		September Released on 27 January 2016 | 518 KB
	August Released on 8 January 2016 | 288 KB		July Released on 22 December 2015 | 312 KB
	June Released on 9 December 2015 | 554 KB		May Released on 6 October 2015 | 630 KB
	April Released on 15 July 2015 | 653 KB		March Released on 3 June 2015 | 672 KB
	February Released on 10 April 2015 | 385 KB		January Released on 3 June 2015 | 741 KB

2014

	December Released on 16 February 2015 | 471 KB		November Released on 16 February 2015 | 441 KB