The National Reserve Bank of Tonga’s Board of Directors at its board meeting on the 8th of December 2020, approved to maintain its current monetary policy measures outlined below. This is to encourage utilization of the excess liquidity in the banking system, through further lending to growth sectors and to support 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.
The Governor of the Reserve Bank, Sione Ngongo Kioa, reported that domestic activities for September 2020 was positive yet slow paced. The primary sector shared higher exports data particularly for agricultural and marine exports. The secondary sector noted more activity with completion of construction works such as school buildings and private housing. Higher lending also for related sectors were reflected in overall growth. The services sector remained stagnant with mostly negative growth recorded due to current situation with the borders. Container registrations declined coinciding with lower import payments also in September 2020, and local businesses are experiencing delayed shipments due to port congestions in overseas ports, additional quarantine measures and the replacement of crew members.
Prices rose slightly over the month yet declined in the year to September 2020 recording levels of 0.6% (monthly) and -0.9% (yearly). The monthly rise in inflation was driven solely by domestic food prices. The annual deflation rate is lower than the deflation rate of 1.6% last month and 0.4% in September 2019. Both domestic and imported items contributed to the annual deflation. In particular, lower prices for electricity, food, kava Tonga, and transport items.
Official foreign reserves rose over the month and in the year to September 2020 by $20.4 million and $85.7 million respectively to $576.5 million, and equivalent to 10.0 months of imports. Both the monthly and annual increase resulted from an increase in budget support receipts, project grant funds, and remittance receipts.
The total banking system still maintains its soundness supported by strong capital and adequate profits. The banks’ total loans to deposit ratio declined again in September 2020 to 74.0% from 75.5% last month, below the 80% minimum. The result of higher increase in deposits than that of loans. The weighted average interest rate spread narrowed both over the month and year to September 2020 by 7.1 and 45.7 basis points respectively to 5.598%, largely driven by the declining lending rates.
In consideration of the above, the Reserve Bank continues to review its GDP forecasts and projects a moderate downturn in future economic growth. Foreign reserves is still expected to be well above the 3 months minimum threshold of import cover, while inflation is also expected to remain below the 5% reference rate. The banking system is still sound supported by high liquidity. Meanwhile, the Reserve Bank continues to be vigilant in 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´ hili ‘enau fakataha ‘i he ‘aho 8 ‘o Tisema 2020, 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 pangikē, 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 pangikē´ (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 pangikē ‘o fakahoa ki he lahi ‘o ‘enau ngaahi fakahū pa‘anga´ (loans/deposit ratio).
- Ke tu’uma’u pē ‘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) ‘i he peseti ‘e 10.
- 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 pangikē, pea holoki 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 pangikē 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´.
Na‘e lipooti ‘e he Kōvana ‘o e Pangikē Pule´, Sione Ngongo Kioa, óku tupu māmālie pē á e ngaahi ngāue faka’ekonōmika fakalotofonua´ í he māhina Sepitema 2020. Í he vakai ki he sekitoa ngoue´, vaotātāa mo e toutai´, naé kake á e lahi ó e ngoue moe toutai naé fakatau atu ki tuápuleánga´. Naé hā mai á e kake í he ngaahi ngāue mei he sekitoa fakatupu koloa´ í hono fakakakato e ngaahi polōseki ki hono toe langa foóu ó e ngaahi loki ako mo e ngaahi ápi nofoánga é niíhi. Naé kake foki moe ngaahi nō tuku atu ki he sekitoa felāveí moe fakatupu koloa ó tokoni ki he tupu fakaékonōmika fakalukufua´. Óku kei uesia lahi pē á e ngaahi ngāue í he sekitoa ngāue´ makatuúnga mei hono tāpuni á e kau’āfonua´ mei he fefolau’aki´. Naé holo foki mo e ngaahi koniteina ne lēsisita´ ó fenāpasi moe holo e totongi pa'anga ki he koloa hū mai´ he māhina Sepitema 2020. Óku lahi foki mo e ngaahi pisinisi óku tuai á hono aútaki mai ‘enau ngaahi uta koloa mei muli´, makatuúnga mei he fonu á e ngaahi taulanga í muli´, ngaahi sivi fakakolonitini foóu óku tānaki mai´, pehē ki hono fetongi ó e kau kauvaka he ngaahi vaka uta koloa´.
Na’e kake sií ‘a e tuúnga hikihiki ó e totongi koloa fakalūkufua΄ í he māhina kae holo í he taú ki Sepitema 2020 áki ‘a e peseti ‘e 0.6 (māhina) mo -0.9 (taú). Naé makatu’unga e hiki he māhina´ ‘i he hiki e totongi ó e koloa meákai fakalotofonua´. Ko e holo á e tuúnga hikihiki ó e totongi koloa´ i he taú´, naé maúlalo ange ia he holo peseti ‘e 1.6 ‘i he māhina kuoósi´, mo e holo peseti ‘e 0.4 ‘i Sepitema 2019. Naé tupu á e holo fakataú´ mei he holo fakatouósi á e totongi ki he ngaahi koloa fakalotofonua´ mo e ngaahi koloa hū mai mei muli΄. Ko e lahi taha á e holo΄ mei he totongi úhila΄, koloa meákai΄, Kava Tonga΄, mo e ngaahi totongi fefonongaáki΄.
Naé lahi ange á e tu‘unga ‘o e pa‘anga talifaki ‘i muli´ (foreign reserves) í he māhina moe taú ki Sepitema 2020 áki á e $20.4 miliona moe $85.7 miliona, ki he $576.5 miliona ó feúnga ia mo e māhina ‘e 10.0 ‘o e ngaahi koloa mo e ngāue hū mai mei muli´. Na’e makatu’unga ‘a e tupu ko eni mei he lahi ange á e ngaahi tokoni fakapaánga ki he patiseti á e Puleánga´, paánga ki he ngaahi polōseki langa fakalakalaka´, pehē foki ki he talafi paánga taautaha mai mei muli´.
Óku kei malu pē ‘a e fai fatongia ‘a e ngaahi pangikē, ‘o poupou ki ai ‘a e mālohi ‘o ‘enau pa‘anga tefito´, pehē ki he‘enau ngaahi tupu´ (profits). Na‘e toe holo ‘a e lahi ‘o e ngaahi fakahū pa‘anga´ ne tuku atu´ ‘i hono fakahoa ki he lahi ‘o e ngaahi nō (loans/deposit ratio) í Sepitema 2020, ki he peseti ‘e 74.0 mei he peseti ‘e 75.5 í he māhina´ kuoósi´. Óku ma‘ulalo eni ‘i he tuúnga maúlalo taha óku tuútuúnií á ia ko e peseti ‘e 80, tupu mei he lahi ange e tupu ‘o e ngaahi fakahū paánga´ (deposits) í he tupu á e ngaahi nō (credit growth). Ko e ‘avalisi ‘o e totongi tupu ‘i he nō mo e fakahū pa’anga´ (weighted average interest rate spread) naé holo fakatouósi ‘i he māhina´ ‘aki ‘a e poini peseti ‘e 7.1, pea ‘i he ta’u´ ki Sepitema 2020 ‘aki ‘a e poini peseti ‘e 45.7 ki he peseti ‘e 5.598. Na’e makatu’unga eni mei he holo ‘a e totongi tupu ‘i he ngaahi nō (lending rates).
Makatu‘unga pea mei´ he ngaahi fakamatala kuo fakahā atu ‘i ‘olunga´, óku kei fakafuofua pe é he Pangikē Pule é holo á e tuúnga faka’ekonōmika ‘a e fonuaˊ í he kahaú vave maiˊ. Óku kei ámanaki pē é fakafiemālie pē ‘a e tuúnga ó e pa‘anga talifaki ‘i mulí´ ‘o lahi ange ‘i he māhina ‘e 3 ‘o e koloa hū maiˊ, pea kei ma’ulalo pē ‘á e tu’unga ‘o e totongi koloa fakalūkufua´ i he peseti ‘e 5. Ko e ngaahi pangikē ‘oku kei malu pē mo ‘enau ngaahi ngāue΄, pea kei hulu pē mo ‘enau pa’anga ngāue΄. ‘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΄.
