Overseas Exchange Transactions for July 2019

Foreign Reserves continued to trend upward

Overall Balance & Foreign Reserve

The official foreign reserves edged higher by $8.6 million to a new high record of $492.9 million in July 2019 equivalent to 8.0 month of imports cover. The monthly movement was attributed to net inflows from foreign exchange deals mostly for remittances receipts. Additionally, the official foreign reserves increased over the year by $16.4 million as a result of higher receipts for budget support, grants, and cyclone relief funds from development partners.

As such, the overall Overseas Exchange Transactions (OET) balance in July 2019 recorded a $8.6 million surplus compared with a $16.0 million surplus in June 2019. Both the total receipts and total payments declined over the month, however total receipts was higher at $66.3 million compared to total payments at $60.7 million. Lower receipts followed the high level of official transfers received last month, and the fall in payments was due to less payments from the current and financial accounts. In year ended terms, payments increased for imports & services payments, gift payments, and offshore investments coupled with the decline in receipts for official transfers, individual constructions and export proceeds. Hence, the overall balance surplus fell over the year from $67.6 million in July 2018 to $16.4 million in July 2019.

On the outlook, the Reserve Bank continues with the aniticipation that the level of foreign reserves will remain at comfortable levels of above 3 months of imports cover in the upcoming months. However, external debt repayments, implementation of infrastructure projects, and expected transfer of offshore investments pose a risk to the foreign reserves outlook. Global uncertainties in oil and commodity prices are also risks to these expectations.

Current Account

Following the significant inflow of official transfer receipts in June 2019, the current account surplus declined to $0.4 million. Movements in the current account are as follows; the goods and services account improved, a turnaround in the income account from a deficit last month whilst the transfers account surplus lowered. The services account surplus rose by $2.0 million as services receipts rose by $3.0 million and outweighed a $1.0 million increase in services payments. Higher service receipts was mainly for travel receipts which rose by $3.8 million and coincided with a 12.8% rise in air arrival passengers. Celebrations which occurred during the month such as King Tupou VI’s birthday and Heilala Week festivities supported the higher number of travellers recorded.

The merchandise trade deficit declined by $1.6 million due to lower import payments coupled with a slight increase in exports receipts over the month. Total import payments fell by $1.0 million as wholesale and retail import payments decreased by $2.0 million and was partially offset by the rise in import payments for oil, construction materials, and government imports. Total export proceeds on the other hand slightly rose by $0.6 million due to a $0.3 million increase in agricultural exports and $0.1 million rise each for marine exports and other exported goods.

In addition, the income account recorded a $1.2 million surplus compared to a $4.8 million deficit last month. This was largely attributed to a $6.4 million decline in income payments after the dividend paid to foreign investors in June 2019. Income receipts also fell by $0.3 million solely driven by lower receipts from the Recognized Seasonal Employee and Seasonal Workers Programme schemes and outweighed a $0.1 million rise in receipts from other salaries and wages. However, the transfers account surplus has lowered substantially after the high level of official transfer receipts in June 2019 for budget support. Nonetheless, private transfer receipts for family support and gift increased in July 2019 by $5.8 million.

In year ended terms, the current account balance surplus fell from $14.8 million surplus to $3.1 million deficit owing to the higher trade deficit and lower transfer receipts. The merchandise trade deficit widened, attributing to the continued growth in import payments by $29.9 million, due to higher payments for all categories of imports such as wholesale & retail, government imports, motor vehicles, oil, and construction materials. Lower transfer receipts of $5.6 million were both official transfers and private transfers such as receipts for family support. Nonetheless, the income account improved on the decline in income payments by $11.9 million as payments for dividends and profits to overseas investors fell by $10.2 million (59.4%). Moreover, the services account surplus increased by $8.0 million due to slightly higher service receipts for travel-related expenses (airfares & travel allowances), freight, maintenance & repair, professional services, and insurance premium pay-outs outweighing the increase in service receipts.

Capital Account 

The capital account surplus declined over the month by $8.9 million. Both official and private capital receipts declined reflecting lower receipts for government-funded projects and households construction purposes by individuals (including non-profit organizations) compared to June 2019. A $0.2 million was recorded in July 2019 for individual capital transfer payments.

Additionally, the capital account surplus lowered over the year by $3.1 million, solely attributed to private capital receipts, which fell by $5.2 million, and outweighed a $0.7 million rise in official capital receipts. These are receipts for investment projects and capital expenditures by the government and receipts by private households for construction purposes.

Financial Account

The financial account recorded a $8.0 million surplus in July 2019 after a deficit of $12.9 million in June 2019 as a result of net inflows by commercial banks to settle foreign exchange deals with their underlying customers. However, the financial account recorded a $18.9 million deficit over the year compared to a surplus in the previous year. This was attributed to offshore investment transfers, principal repayment of the Government loan to EXIM Bank of China and higher inter-bank payments.

Overseas Exchange Transactions Releases

• Overseas Exchange Transactions Releases for 2019
• 2018
• 2017
• 2016
• 2015
• 2014

Overseas Exchange Transactions Releases for 2019

	July Released on 6 December 2019 | 157 KB
	May Released on 1 October 2019 | 243 KB		June Released on 17 October 2019 | 274 KB
	March Released on 3 July 2019 | 155 KB		April Released on 29 July 2019 | 247 KB
	January Released on 18 June 2019 | 152 KB		February Released on 21 June 2019 | 158 KB

2018

	November Released on 5 April 2019 | 144 KB		December Released on 1 May 2019 | 143 KB
	September Released on 25 February 2019 | 143 KB		October Released on 25 February 2019 | 143 KB
	July Released on 23 November 2018 | 150 KB		August Released on 27 December 2018 | 154 KB
	May Released on 15 August 2018 | 337 KB		June Released on 4 October 2018 | 148 KB
	March Released on 7 June 2018 | 174 KB		April Released on 15 August 2018 | 333 KB
	January Released on 16 May 2018 | 179 KB		February Released on 29 May 2018 | 174 KB

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