The National Reserve Bank of Tonga’s Board of Directors at its board meeting on the 10th of June 2021, 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, shared that domestic economic activities improved during March 2021. The primary sector reported more exports of agricultural products, particularly cassava, yam, and taro. Lending to the industries under the secondary sector increased, implying more activities for the construction and manufacturing sectors in particular. Total container registrations increased substantially in March 2021 as a result of mostly business container registrations indicating an active wholesale and retail industry. However, vehicle registrations declined in the month.
Inflation rose by 1.4% in March 2021 due yet again to higher imported and domestic prices. Similar to previous months, this resulted from higher prices for food, fuel, and electricity. Headline annual inflation rose by 3.3% as a result of an increase in both higher imported and domestic prices. This stemmed from higher prices for food, tobacco and alcoholic beverages (imported) whilst higher prices for food, tobacco, and clothing & footwear drove domestic prices higher.
In March 2021, the official foreign reserves continued its downward trend following last month’s decline. It fell by $6.7 million to $685.7 million, equivalent to 11.7 months of imports. This was due to an increase in import payments during the month. However, annually, foreign reserves increased significantly by $228.2 million. This is mainly attributed to 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. The increase in total deposits and the decline in total lending resulted in a lower loan to deposit ratio of 67.2% in March 2021, a fall from 68.2% last month and still below the 80% minimum. The weighted average interest rate spread narrowed by 1.2 basis points in the month of March 2021 and annually by 26.1 basis points to 5.7%.
The Reserve Bank’s latest GDP outlook projects a deeper contraction in the economy for 2020/21. However, the level of foreign reserves is still expected to be above the 3 months minimum threshold of import cover. Inflation is expected to pick up above the 5% reference rate in the upcoming months in line with the rebound in global prices for food, oil, and commodities coupled with rising freight rates amidst the COVID-19 uncertainties. However, it is expected to fall back below the 5% reference range by the last quarter of 2021. The banking system is still sound supported by high liquidity and capital positions. 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´ í he ‘enau fakataha ‘i he ‘aho 10 ó Sune 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 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 pangikee´, 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 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 pangikee´ 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, óku fakalakalaka á e ngaahi ngāue faka’ekonōmika fakalotofonua´ ‘i Ma’asi 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´, úfi´, mo e talo. Naé tupu foki mo e ngaahi nō ne tuku atu ki he sekitoa langa´ mo e fakatupu koloa´ tupu mei he kake í he ngaahi ngāue í he sekitoa ko ia´. Naé tupu lahi á e lesisita ó e ngaahi koniteina mei muli´ í Ma’asi 2021 makatu’unga mei he lahi ange á e ngaahi koniteina á e ngaahi pisinisi ó hā mahino mai á e tupu e ngaahi ngāue í he sekitoa fefakatauáki´.
Na’e tupu peseti ‘e 1.4 ‘a e hikihiki ‘o e totongi koloa΄ ‘i he māhina Ma’asi 2021, makatuúnga mei he kake fakatouósi á e ngaahi totongi koloa hū mai mei muli΄ mo e ngaahi totongi koloa fakalotofonua΄. ‘Oku tatau pē eni mo e ngaahi māhina kuohili΄ ó makatu’unga mei he hiki á e ngaahi totongi úhila΄, lolo΄, mo e meákai΄. Na’e tupu peseti ‘e 3.3 ‘a e hikihiki fakata’u ‘o e totongi koloa΄ makatu’unga mei he hiki 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 koloa me’akai΄, tapaka΄, pea mo e kava malohi΄, kā koe ngaahi koloa fakalotofonua΄ óku kau ai e koloa me’akai΄, tapaka΄, vala΄ mo e ngaahi suu΄.
Ko e tu‘unga ‘o e pa‘anga talifaki ‘i muli´ (foreign reserves) naé hokohoko atu pē ‘ene holo´ í Ma’asi 2021. Na’e holo áki á e $6.7 miliona ki he $685.7 miliona, ‘o fe’unga ia mo e māhina ‘e 11.7 ó e ngaahi koloa mo e ngāue hū mai´. Na’e makatu’unga ‘a e holo ko eni´ mei he lahi ange ‘a e ngaahi totongi hū koloa mei muli´. Kaekehe, í he taú´, óku kei kake lahi pē á e tu‘unga ‘o e pa‘anga talifaki ‘i muli´ áki á e $228.2 miliona. Óku makatuúnga eni mei he lahi ange ‘a e ngaahi tokoni fakapa’anga ki he patiseti ‘a e Pule’anga´, ngaahi polōseki lalahi´, moe talafi pa’anga taautaha mai mei 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´ kae holo á e ngaahi nō ne tuku atu΄. Í heéne pehē, naé kake hake ‘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 67.2 mei he peseti é 68.2 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´ áki á e poini peseti é 1.2, pea ‘i he ta’u´ ki Ma’asi 2021 áki á e poini peseti e 26.1 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 me’akai΄, lolo΄ mo e koloa fakatau΄, fakataha mo e hiki á e ngaahi totongi feleti΄ tupunga mei he tu’unga taepau á e COVID-19. 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΄.
