Global shocks are becoming more frequent and more severe, transmitting almost instantly through prices to the local economy. The latest, the Middle East crisis, added to global supply and transportation disruptions, and weighed on Tonga’s inflation and growth outlook. Headline inflation rose from 2.0 percent in February 2026 to 7.9 percent in May 2026, before closing FY2026 at 7.1 percent.

NRBT must remain relevant by strengthening its reaction function, its ability to weigh competing risks, navigating policy trade-offs and responding consistently within the hierarchy of its statutory objectives. This is particularly important given Tonga’s highly vulnerable small open economy where monetary policy transmission is challenging, imported inflation is significant, excess liquidity remains high, and policy decisions must also safeguard the credibility of the exchange rate peg.

With the support of the Board, Management advanced reforms to modernize monetary policy operations; strengthen prudential supervision and AML/CFT compliance with various convictions; reviewed foreign reserves management governance, risks, performance, strategic asset allocation, and currency allocation; facilitated access to quality credit; strengthened risk management and governance; and invested in enhancing systems, infrastructure and staff resources and skills required for more effective policy delivery. Resilience also requires financial strength where the continued growth in total assets and, importantly, net assets strengthened its capacity to manage financial risks while maintaining operational independence and delivering its statutory mandate.

Operational resilience is equally important. Cyber risk, AML and financial crimes, business disruption and increasing digital financial services require stronger safeguards and modern infrastructure. They form part of the Bank’s resilience agenda, protecting confidence, ensuring continuity of critical financial services and enabling safer and more efficient financial intermediation.

NRBT achieved an 88.6 percent overall delivery rate against its 79 measurable improvement targets in FY2026, in addition to its routine deliveries. Twenty-four targets were fully completed, representing 30.4 percent compared with 13 percent in 2025, while a further 46 targets remained on track and in progress. The successful resolution of litigations in the Bank’s favor also reinforced institutional resilience and confidence in its supervisory actions.

The achievements of FY2026 have established stronger foundations for the year ahead: a better-capitalized, more capable and more resilient NRBT, with stronger policy tools and institutional safeguards to navigate an increasingly uncertain global environment while continuing to protect price stability, external stability, financial stability and the wider interests of the people of Tonga.

Governor Tatafu Moeaki