At its monthly meeting on 29th March 2017, the Reserve Bank of Tonga’s Board maintained its accommodative monetary policy measures outlined below. This is to encourage the utilisation of the excess liquidity in the banking system, increase lending in order to support economic growth and strengthen the monetary policy transmission mechanism;
- maintain the monetary policy rate at 0% (zero interest rate policy);
- maintain the minimum loans/deposit ratio of 80%;
- maintain the Statutory Reserve Deposit ratio at 10% effective in July 2017; and
- maintain the inflation reference rate at 5%.
The Governor of the Reserve Bank, Sione Ngongo Kioa, stated that the domestic economy somewhat slowed over the month of January 2017, a similar trend to previous years. The winding down of economic activity was due to seasonality in the agricultural products as well as the end of the festive and Christmas holiday season. However, the foreign reserves continued to rise over the month to $380.8 million due mainly to receipt of government grant. This was equivalent to 10.4 months of import cover, which is well above the Reserve Bank’s minimum range of 3 – 4 months. Annual inflation rate continued rising by 5.4% in the year ended January 2017 but has slowed from the annual inflation rate of 6.7% in December 2016. The rise in annual inflation was mainly due to the new customs duty and excise tax introduced in July 2016 and the continuous short supply of kava-Tonga.
The banking system remained sound with strong capital position maintained, supported by comfortable profitability, and non-performing loans remained low. Excess liquidity remained high due to continuous rise in deposits over the year by 18.7%, which was supported by the higher foreign reserves, outweighing the strong credit of 16.2%. Total loans to deposit ratio continued to fall in January 2017 to 72.4% from 74.1% in the previous month, and remained below the 80% minimum loan to deposit ratio. This indicated more capacity remains for further lending by the banks.
The Reserve Bank’s expectation for strong economic activity remains in the medium term. The level of foreign reserves is also projected to remain adequate supported by estimated higher receipts of remittances and foreign aid, despite the expected increase in imports. Upward inflationary pressure is also expected in the near term, as a result of the new customs duty and excise tax introduced in July 2016, however the Reserve Bank forecasts the annual inflation rate to be well below the reference rate of 5% per annum in 2017/18.
The Reserve Bank will continue to closely monitor developments in the domestic and global economy, and update its monetary policy setting to maintain internal and external monetary stability, and to promote a sound and efficient financial system in order to support macroeconomic stability and economic growth.
Tu’utu’uni ki he Fokotu’utu’u Ngāue Fakapa’anga
‘I he fakataha ko ia ‘a e Poate ‘a e kau Talēkita ‘a e Pangikē Pule Fakafonua ‘o Tongá, ‘i he ‘aho 29 ‘o Ma’asi 2017, na’e tali ai ‘e he Poate ke kei hokohoko atu ai pē ‘a e ngaahi tu’utu’uni fakangāue lolotongá, ke faka’ai’ai ‘aki mo pātoloaki ‘a e ngaahi ngāue faka’ekonōmika ‘a e fonuá:
- Ke kei hoko atu pe hono ta’etotongi tupu ‘a e pa’anga ngāue ‘a e ngaahi pangiké (Exchange Settlement Account) ‘oku fakahū ‘i he Pangikē Pulé;
- Ke ‘oua e toe ma’ulalo hifo he pēseti ‘e 80 ‘o e lahi e ngaahi nō ‘oku tukuatu ‘ehe ngaahi pangike ‘o fakahoa ki he lahi ‘o ‘enau ngaahi fakahū pa’angá (loan/deposit ratio);
- Ke hiki hake e lahi ‘o e pa’anga ‘a e ngaahi pangiké fakakomesiale, ‘oku tu’utu’uni fakalao ke tauhi ‘i he Pangikē Pulé (Statutory Reserve Deposit) ‘i he pēseti ‘e 10 ‘o kamata ‘i Siulai 2017; pea
- Ke tu’uma’u pē ‘a e fakaámu ki he hikihiki e totongi ‘o e ngaahi koloá ‘i he pēseti ‘e 5 ‘i he ta’u.
Na’e fakahā ‘e he Kōvana ‘o e Pangikē Pulé, Sione Ngongo Kioa, na’e ‘i ai ‘a e ki’i holo ‘i he ngaahi ngaue faka’ekonōmika fakalotofonuá ‘i Sanuali 2017, ‘a ia na’e tatau pē eni mo e ngaahi ta’u kuo maliu atu. Na’e makatu’unga eni mei he feliuliuaki ‘i he fa’ahi ta’u ngoué pea pehē ki he faka’osinga ‘o e ngaahi kātoanga fakafiefia ‘i he Kilisimasí. Ka neongo ia, na’e kei hokohoko atu pē ‘a e kake ‘a e pa’anga talifaki ‘i mulí (foreign reserves) ki he $380.8 miliona ‘i he faka’osinga ‘o Sanualí 2017 ‘o makatu’unga mei he hū mai ‘a e pa’anga tokoni ki he pule’angá. ‘Oku fe’unga ‘a e tu’unga ‘o e pa’anga talifakí pea mo e māhina ‘e 10.4 ‘o e koloa hū mai mei mulí (imports), ‘a ia ‘oku kei mā’olunga ‘aupito ange eni ‘i he tu’unga fe’unga ‘oku fiema’u ‘e he Pangikē Pulé, ‘a ia ko e māhina ‘e 3 ki he 4 ‘o e koloa hū mai mei mulí. ‘Oku hokohoko atu ai pē mo e hikihiki ‘i he totongi koloa fakata’ú, ‘o hiki ‘aki e pēseti ‘e 5.4 ‘i he faka’osinga ‘o e ta’ú ki Sanuali 2017, ‘a ia ko e holo hifo ia mei he hiki pēseti ‘e 6.7 ‘i Tīsema 2016. ‘Oku makatu’unga ‘a e hiki fakata’u ko ‘ení mei he ngaahi totongi tute fo’ou ne fakahoko ‘i Siulai 2016 pea mo e si’isi’i ange ‘a e lahi ‘o e kava-Tongá.
‘Oku kei ‘i he tu’unga lelei ‘aupito ‘a e fai fatongia ‘a e ngaahi pangikē fakakomēsialé, ‘o makatu’unga mei he tu’unga fakafiemālie ‘a ‘enau tu’unga tupú (profitability) pea pehē ki he kei ‘i he tu’unga mā’ulalo ai pē ‘a e ngaahi nō ‘oku palopalemá. ‘Oku kei lahi ‘aupito pē ‘a e ngaahi pa’anga ngāue ‘a e ngaahi pangikē (excess liquidity), makatu’unga mei he toe lahi ange ‘a e tupu ‘i he ngaahi pa’anga tipōsití, ‘a ia na’e tupu ‘aki ‘a e pēseti ‘e 18.7 ‘i he faka’osinga ‘o e ta’ú, ‘i hono fakahoa ki he tupu pēseti ‘e 16.2 ‘i he ngaahi nō kuo tuku atú. ‘Oku tokoni ‘a e toe lelei ange ‘a e pa’anga talifaki ‘i mulí ki he tupu ‘i he pa’anga tipōsití. Na’e holo leva ‘a e peseti ‘o e ngaahi nō ‘i hono ‘o fakahoa ki he lahi ‘o e ngaahi fakahū pa’angá (loan/deposit ratio) ki he pēseti ‘e 72.4 ‘i Sanuali 2017 mei he pēseti ‘e 74.1 ‘i he māhina kuo ‘osí. ‘Oku kei ma’ulalo pē ‘eni ‘i he tu’unga ma’ulalo taha kuo tu’utu’uni ‘e he Pangike Pule ke a’usia ‘e he ngaahi pangike ‘i Sune 2017, ‘a ia ko e pēseti ‘e 80. ‘Oku hā mahino mei heni ‘a e kei ‘i ai pe ‘a faingamālie ke toe fakalahi ‘a e ngaahi nō ke tuku atu ‘e he ngaahi pangikē.
‘Oku kei fakafuofua pē ‘e he Pangikē Pulé ‘e mālohi ‘a e tupu faka’ekonōmika fakalotofonuá ‘i he kaha’u. Ko e pa’anga talifaki ‘i mulí ‘oku fakafuofua ‘e kei ‘i he tu’unga fakafiemālie pē. ‘Oku makatu’unga eni mei he fakafuofua ‘e kei ‘i he tu’unga mā’olunga ai pē ‘a e ngaahi talafi pa’anga mei mulí pea pehē ki he pa’anga tokoni mei he ngaahi hoa ngāue langa fakalakalaká, neongo ‘e ala uesia ‘a e fakafuofua ko ‘ení mei he fakafuofua ‘e toe lahi ange mo e totongi ‘o e koloa hū mai mei mulí. ‘Oku toe fakafuofua ‘e kei hokohoko atu ai pē ‘a e hikihiki ‘i he totongi koloá ‘i he kaha’u vave maí, ‘o makatu’unga mei he ngaahi totongi tute fo’ou ne fakahoko ‘i Siulai 2016, pea ke toki holo ki he tu’unga fe’unga kuo tāketi ‘e he Pangikē Pulé ‘i he ta’u fakapa’anga 2017/18 ‘a ia ko e pēseti ‘e 5.
‘E kei hokohoko atu ai pē ‘a e tokanga ‘a e Pangikē Pulé ki hono siofi mo muimui’i ofi e ngaahi fakalakalaka faka’ekonōmika fakalotofonuá mo tu’apule’angá, mo tu’u mateuteu ke liliu ‘a e ngaahi fokotu’utu’u ngāue fakapa’angá ‘o ka fiema’u, ke tauhi e ma’uma’uluta ‘a e tu’unga fakapa’angá pea mo langa hake ha sisitemi fakapa’anga ‘oku malu mo lelei.
