The National Reserve Bank of Tonga’s Board of Directors, at its board meeting on the 5th of August 2021, approved to maintain its current monetary policy measures outlined below. This is to encourage utilization of the excess liquidity in the banking system by further lending to growth sectors and supporting the economy from the impacts of COVID-19.
- 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%.
- Maintain the inflation reference rate at 5%.
- Monitor the commercial banks' liquidity and adjust the SRD ratio if needed.
- Monitoring the commercial banks’ capital reserves and adjust further when required.
- Ease the exchange control requirements when required.
- Continue to issue Government Bonds.
- Maintain clear channels of effective communications with the financial institutions for adequate preparedness.
- Continue to be transparent and raise awareness of its monetary policy decisions through press releases to the public.
- Closely monitor the impacts of the pandemic in the financial system for early detection of any signs of vulnerability.
- Continue to ensure both commercial banks and non-bank financial institutions adheres to all Government declarations regarding COVID-19 in the workplace while delivering essential financial services to the public.
According to the Governor of the Reserve Bank, Sione Ngongo Kioa, the domestic economic activities showed some improvements in May 2021. The primary sector reported higher exports of agricultural products, particularly cassava and taro. Meanwhile, the secondary industry varied with lower lending to the manufacturing and utilities sectors, while lending to the construction sector rose. The service sector slightly improved over the month, with container and vehicle registrations rising. This aligned with a rise in import payments indicating a more active trading sector.
Inflation declined by 0.2% in May 2021 after increasing on a monthly basis since October 2020, mainly due to lower domestic food prices. Headline annual inflation rose again by 4.7% as a result of an increase in both imported and domestic prices. This stemmed from higher imported prices for fuel, food, and tobacco, whilst local food & tobacco prices drove domestic prices higher.
In May 2021, the official foreign reserves rose by $9.9 million to $689.5 million, equivalent to 12.0 months of imports. This was attributed mostly to receipts of donor funds to support Tonga’s recovery from COVID-19. In year ended terms, foreign reserves still increased significantly by $199.9 million from receipts of budget support, official grants, and remittances.
The total banking system continues to maintain its soundness, supported by strong capital positions and excess liquidity. Total deposits rose by $9.5 million (1.3%) while total lending declined by $1.5 million (0.3%), resulting in a lower loan to deposit ratio of 64.9% in May 2021, falling from 66.0% last month and still below the 80% minimum. The weighted average interest rate spread marginally narrowed in May 2021 by 0.02 basis points, however, it widened annually by 3.9 basis points to 5.7%.
The Reserve Bank’s GDP outlook projects a deeper contraction in the economy for 2020/21. Extended lockdowns and uncertainties, particularly in relation to COVID-19, remain the most significant risk to the outlook. However, foreign reserves is still expected to remain at sufficient levels above the 3 months minimum threshold of import cover. Inflation is expected to continue rising above the 5% reference rate in mid-2021, in line with the rebound in global oil and commodity prices. However, it is expected that inflation will fall back below 5% by the last quarter of 2021. The banking system is still sound supported by high liquidity, adequate capital and subdued credit growth. The Reserve Bank continues to be vigilant by closely monitoring its economic and financial indicators, and stands ready to adjust its monetary policy settings if needed to maintain internal and external stability and support macroeconomic growth.
Tu‘utu‘uni ki he Fokotu‘utu‘u Ngāue Fakapa‘anga
Na‘e tali ‘e he Poate ‘a e kau Talēkita ‘o e Pangikē Pule Fakafonua ‘o Tonga´ í he ‘enau fakataha ‘i he ‘aho 5 ó ‘Aokosi 2021, ke kei hoko atu pē ‘a e ngaahi tu‘utu‘uni ngāue fakapa‘anga lolotonga´ ‘a ia ‘oku hā atu ‘i lalo´. ‘Oku fakataumu‘a eni ke ngāue’aki ‘a e hulu ‘i he pa‘anga ngāue ‘a e ngaahi pangikee´, ke nō atu ki he ngaahi sekitoa fakatupu´ pea mo tokoni’i e ‘ekonōmika ‘a e fonua´ mei he ngaahi uesia ‘o e COVID-19.
- Ke hoko atu pē hono ta’etotongi ‘a e tupu (interest) ‘i he ngaahi ‘akauni pa‘anga ngāue ‘a e ngaahi pangikee´ (Exchange Settlement Account) ‘oku fakahū ‘i he Pangikē Pule´ (zero interest rate policy).
- Ke ‘oua ‘e toe ma‘ulalo hifo ‘i he peseti ‘e 80 ‘a e lahi e ngaahi nō ‘oku tuku atu ‘e he ngaahi pangikee´ ‘o fakahoa ki he lahi ‘o ‘enau ngaahi fakahū pa‘anga´ (loans/deposit ratio).
- Ke tu’uma’u ‘i he peseti ‘e 10 ‘a e lahi ‘o e pa‘anga ‘a e ngaahi pangikē fakakomēsiale´, ‘a ia ‘oku tu‘utu‘uni fakalao ke tauhi ‘i he Pangikē Pule´ (Statutory Reserve Deposit).
- Ke tauhi pē ‘a e tu‘unga ‘o e hikihiki ‘i he totongi ‘o e ngaahi koloa´ (inflation reference rate) ke ‘oua na’a laka hake í he peseti ‘e 5.
- Muimui’i ofi ‘a e lahi ‘o e pa’anga ngāue ‘a e ngaahi pangikee´, pea liliu e peseti ‘oku tu’utu’uni fakalao ke tauhi ‘i he Pangikē Pule´ (SRD) ‘oka fiema’u.
- Vakai’i ‘a e tu’unga ‘oku ‘i ai ‘a e pa’anga tefito ‘a e ngaahi pangikee´ ke fe’unga, pea liliu ‘a e tu’utu’uni lolotonga´ ‘i ha taimi ‘e fiema’u ai.
- Fakafaingofua’i ‘a e ngaahi tu’utu’uni fekau’aki mo e fetongi pa’anga muli´ ’i ha taimi ‘e fiema’u ai.
- Hokohoko atu pē ‘a e founga lolotonga ki hono fakatau ‘a e ngaahi pōnite ‘a e Pule’anga´.
- Tauhi ‘a e fetu’utaki vāofi mo e ngaahi kautaha fakapa’anga´ ke fakapapau’i ‘oku nau ‘i ha tu’unga mateuteu fe’unga.
- Hoko atu pē hono faka’ata kitu’a ‘a e ngaahi tu’utu’uni ngāue ‘a e Pangikē Pule´ ‘aki hono fakahā atu ‘i he ngaahi fanongonongo tuku atu ki he kakai ‘o e fonua´.
- Muimui’i ofi ‘a e ngaahi uesia ‘o e mafola fakamāmani lahi ‘a e COVID-19 ‘i he ngaahi ngāue fakapa’anga´ telia ha ngaahi faka’ilonga ‘o ha tu’ulaveangofua.
- Fakapapau’i ‘oku hokohoko atu pē ‘a e talangofua ‘a e ngaahi pangikē´ mo e ngaahi kautaha fakapa’anga ‘oku ‘ikai ko ha pangikē ki he ngaahi tu’utu’uni Fakapule’anga fekau’aki mo e COVID-19, pea ‘i he taimi tatau ‘oku kei fakahoko pe ‘a e ngaahi ngāue fakapa’anga´ ki he kakai ‘o e fonua´.
Í he lipooti á e Kōvana ‘o e Pangikē Pule´, Sione Ngongo Kioa, na’e ‘i ai pe ‘a e fakalakalaka e ngaahi ngāue faka’ekonōmika fakalotofonua´ ‘i Mē 2021. ‘I he vakai ki he sekitoa ngoue´, vaotātaa´ mo e toutai´, naé kake hake á e ngoue naé uta ki tuápuleánga´ tautefito ki he manioke´ mo e talo. Naé fetō’aki á e ola e ngaahi ngāue í he tafa’aki ‘o e fakatupu koloa´ ó hā mai í he holo á e ngaahi nō ne tuku atu ki he sekitoa ngaahi koloa mo e ngaahi fiema’u faka’api´, kae kake hake á e ngaahi nō ne tuku atu ki he sekitoa langa´. Naé í ai e kií fakalakalaka í he sekitoa ngaahi ngāue´ í he māhina´, í he lahi ange á e lēsisita ó e ngaahi koniteina mei muli´ mo e ngaahi me’alele´. Óku fenāpasi eni mo e kake hake á e totongi pa’anga ki he koloa hū mai mei muli´ á ia óku ngali tokoni eni ki he sekitoa fefakatauáki´.
Na’e holo peseti ‘e 0.2 ‘a e hikihiki ‘o e totongi koloa΄ ‘i he māhina Mē 2021, hili ia á ‘ene tupu hokohoko talu mei ‘Okatapa 2020, makatuúnga mei he holo á e ngaahi totongi meákai fakalotofonua΄. Na’e tupu peseti ‘e 4.7 ‘a e hikihiki fakata’u ‘o e totongi koloa΄ makatu’unga mei he hiki fakatou’osi á e ngaahi totongi koloa hū mai mei muli΄ mo e fakalotofonua΄. Ko e ngaahi koloa hū mai ne hiki hake hono totongi΄ óku kau ai e lolo΄, koloa me’akai΄, pea mo e tapaka΄, kae hiki e ngaahi totongi fakalotofonua΄ mei he mamafa ange á e koloa me’akai΄ mo e tapaka΄.
Ko e tu‘unga ‘o e pa‘anga talifaki ‘i muli´ (foreign reserves) naé kake hake í Mē 2021 áki á e $9.9 miliona ki he $689.5 miliona, ‘o fe’unga ia mo e māhina ‘e 12.0 ó e ngaahi koloa mo e ngāue hū mai´. Na’e makatu’unga ‘a e kake ko eni´ mei hono aútaki mai ‘a e ngaahi tokoni fakapaánga mei hotau ngaahi hoa ngaue fakalakalaka´ ke tokoni’i e fakaakeake á Tonga mei he ngaahi uesia ó e COVID-19. ‘I he taú´, naé toe kake lahi pē á e tu‘unga ‘o e pa‘anga talifaki ‘i muli´ áki á e $199.9 miliona makatuúnga mei he lahi ange ‘a e ngaahi tokoni fakapa’anga ki he patiseti ‘a e Pule’anga´, ngaahi tokoni fakapa´anga ki he ngaahi polōseki á e Puleánga´, moe talafi pa’anga taautaha mai mei hotau kainga í muli´.
‘Oku kei malu pē ‘a e fai fatongia ‘a e ngaahi pangikee´, ‘o poupou ki ai ‘a e mālohi ‘o ‘enau pa‘anga tefito´ (capital), pehē ki he hulu ‘enau pa’anga ngāue´ (liquidity). Na’e kake ‘a e ngaahi fakahū pa‘anga΄ he māhina´ áki á e $9.5 miliona (peseti e 1.3) kae holo á e ngaahi nō ne tuku atu΄ áki á e $1.5 miliona (peseti e 0.3). Í heéne pehee, naé holo ‘a e lahi ‘o e ngaahi fakahū pa‘anga´, ‘i hono fakahoa ki he lahi ‘o e ngaahi nō ne tuku atu´ (loans/deposit ratio) ki he peseti é 64.9 mei he peseti é 66.0 í he māhina kuoósi´. ‘Oku kei ma‘ulalo pē eni ‘i he tu’unga ma’ulalo taha ‘oku tu’utu’uni’i´ ‘a ia ko e peseti ‘e 80. Ko e ‘avalisi ‘o e totongi tupu ‘i he nō mo e fakahū pa’anga´ (weighted average interest rate spread) na’e holo hifo í he māhina´ ‘o Mē 2021 áki á e poini peseti é 0.02, kae tupu ‘i he ta’u´ áki á e poini peseti e 3.9 ki he peseti ‘e 5.7.
‘I he vakai fakamuimui ‘a e Pangikē Pule΄ ki he tupu faka’ekonōmika fakalotofonua΄, ‘oku kei tu’uma’u pē ‘a e fakafuofua ‘e holo ‘a e tupu faka’ekonōmika΄ ‘i he taú 2020/21. Ka neongo eni, koe tu’unga ó e pa‘anga talifaki ‘i mulí´ óku ámanaki ‘e kei fakafiemālie pē ‘o lahi ange ‘i he māhina ‘e 3 ‘o e koloa mo e ngāue hū maiˊ. Ko e tuúnga e hikihiki ‘o e totongi koloa fakalūkufua΄ í he taú´ ‘oku fakafuofua é maólunga hake í he peseti é 5 makatu’unga mei he hiki e ngaahi totongi fakamāmani lahi ki he koloa lolo΄ mo e koloa fakatau΄. Ka neongo ia, óku ámanaki é toe holo pē á e hikihiki ó e totongi koloa΄ ke maúlalo ange he peseti é 5 í he kuata fakaósi ó e 2021. Ko e ngaahi pangikē ‘oku kei malu pē mo ‘enau ngaahi ngāue΄, ó tokoni ki ai á e hulu ‘o ‘enau pa’anga ngāue΄ mo e lahi énau sinoí paánga tefito´. ‘Oku mātu’aki tokanga ‘a e Pangikē Pule´ ki hono muimui‘i ofi ‘a e ola ‘o e ngaahi ngāue faka‘ekonōmika΄ mo fakapa’anga΄, pea mateuteu ke liliu ‘a e ngaahi fokotu‘utu‘u ngāue fakapa‘anga lolotonga´ ‘o ka fiema‘u ke pukepuke ‘aki ‘a e ma’uma’uluta fakalotofonua΄ mo fakatu’apule’anga΄, pea ke tokoni foki ki he tupu faka‘ekonōmika fakalūkufua΄.
