Overseas Exchange Transactions for November 2018

Official transfer receipts further boost OET surplus in November

Overall Balance & Foreign Reserve

The balance of the overall OET rose further by $6.2 million in November 2018 to a surplus of $11.4 million, owing mostly to an increase in the official transfer receipts. Government receipts from development partners over the month drove the higher surplus in the current account. This further contributed to a rise in the official foreign reserves to $468.7 million in November, equivalent to 8.1 months of import cover. Over the year, the overall OET surplus balance declined by $19.9 million to $43.9 million. This was attributed mainly to the widening merchandise trade deficit fueled by higher import payments.

Looking ahead, the Reserve Bank continues to project that the level of foreign reserves will remain at a comfortable level and above the 3 months of import cover. This is expected to be supported by higher receipts of remittances and foreign aid. However, possible further delays to the inflow of aid and budget support from development partners combined with the pace of development in the domestic economic activities, may pose a risk to the foreign reserves outlook. Global uncertainties regarding oil and commodities prices paired with Tonga’s vulnerability to natural disasters are also risks to the projections above.

Current Account

The current account balance improved further over November and recorded a higher surplus of $21.2 million. This resulted mainly from higher transfers particularly official receipts which increased by $12.7 million in November and stemming largely from government receipts for the purposes of budget support and project funds from development partners. Additionally, a decline of $7.5 million in the merchandise trade deficit also supported the higher current account surplus due to lower import payments for wholesale & retail goods, construction goods, and other imports. Furthermore, export proceeds continued to rise reflecting receipts of squash export proceeds.

Net service receipts recorded a lower surplus over the month in line with the decline in travel receipts. Similarly, the income balance recorded a lower surplus due to lower receipts of compensation of employees.

Over the year, the current account surplus declined by $29.4 million to $17.2 million. This resulted mainly from widening deficits in the merchandise trade account. The higher payments for imported wholesale & retail goods, oil, other imports, and vehicles produced a higher merchandise trade deficit. This was reflected also in higher container registrations which rose by 1,024 containers indicating a busy trade sector. On the other hand, all categories of exports declined except for other marine exports. Meanwhile, the lower service account surplus further contributed to the declining current account surplus. These movements had offset the improved surpluses recorded for the income and official transfer accounts. Fewer payments of dividend funds offshore lead to the net income receipt over the year, whilst the inflow of budget support and government grants boosted the net transfer receipts.

Capital Account

The surplus in the capital account fell slightly to a balance of $1.0 million in November. This was due mainly to a $1.0 million decline in official capital receipts compared higher receipts of government grants for capital projects in the previous month. Meanwhile, receipts of funds for private capital investment increased which had partially offset the monthly decline in the overall capital account surplus.

Over the year, the capital account continued to maintain its position of holding the highest share in the overall OET balance surplus despite decreasing by $5.1 million to $33.2 million. The lower capital account surplus attributes mostly from a decline in net private capital receipts of $7.9 million, outweighing the $2.8 million increase in net official capital receipts. These capital receipts by both Government and the private sector were for investment projects and capital expenditures. Additionally, this included construction and on-going government projects such as the Tonga Transport Sector Consolidation road maintenance projects and the renovation work at Fua’amotu Airport under the Pacific Aviation Investment Program.

Financial Account

The financial account balance decreased and recorded a deficit for the month and over year to November. This is caused largely by the decline in other investments particularly interbank payments. Annually, the financial account registered a deficit although it improved from the previous year.

Overseas Exchange Transactions Releases

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

Overseas Exchange Transactions Releases for 2018

	November Released on 5 April 2019 | 144 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