The National Reserve Bank of Tonga’s Board of Directors at its board meeting on the 11th November 2019, 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 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%, and
- maintain the inflation reference rate at 5%.
The Governor of the Reserve Bank, Sione Ngongo Kioa, indicated that domestic economic activities continued to vary in September 2019. Export of fish and marine products doubled over the month by 344.8 tons mainly driven by tuna exports. The agricultural sector showed a decline over the month reflected by a fall in agricultural proceeds of $0.3 million (23.4%), however local supply of root crops and kava Tonga improved and is reflected in the lower prices. On the other hand, activities in the industry sector is slowing as reflected in the declined lending to the construction, mining & quarrying, manufacturing and utility sectors. Individual housing loans also declined in September, however rose over the year. The services sector showed mixed growth yet again, with declines in both international air arrivals and departures in September while container registrations increased. Vehicle registrations continued to decline.
The banking system continues to be sound supported by strong capital and adequate profits. The banks’ total loans to deposit ratio slightly decreased from 79.0% to 78.6% over the month, reflecting loans decreasing more than the decrease in deposits. This still remains close to the 80% minimum loan to deposit ratio. However, the liquidity in the banking system remains relatively high indicating existing capacity is still available for further lending. The weighted average interest rate spread narrowed to 6.06% due to a decrease in weighted average lending rates coupled with an increase in weighted average deposit rates.
The official foreign reserves fell by $0.9 million in September to $490.8 million, (equivalent to 7.9 months of imports cover) due to a net outflow in foreign exchange deals with commercial banks to cater for customers’ overseas payments during the month. Annually, foreign reserves rose by $38.7 million due net inflows from budget support, project funds and remittances.
A monthly deflation was recorded for September 2019 of 0.1% and owing mostly to lower domestic prices of kava-Tonga and local food items such as root crops and vegetables. However, import prices rose over the month and was driven mostly by the increases in fuel prices and imported food items. Annual headline inflation returned in September 2019 by 0.4% compared to a 0.1% deflation in August 2019, and 5.5% inflation in September 2018. This was due to higher imported inflation offsetting the lower domestic prices.
The medium-term outlook on Tonga’s economic performance remains positive, yet weather uncertainty and global uncertainties continue to pose a risk to this expectation. The level of foreign reserves is projected to remain at a comfortable level, and inflation is expected to remain below the reference rate of 5%. The banking system is anticipated to continue to remain sound.
Given the above developments and outlook, the current monetary policy stance is considered appropriate in the medium term. The Reserve Bank continues to adopt measures to encourage the utilization of the excess liquidity in the banking system to increase lending, support domestic economic activities, and strengthen the monetary policy transmission mechanism. Meanwhile, the Reserve Bank will continue to remain vigilant and closely monitor external and domestic developments and may change its monetary policy setting to support its monetary policy objectives.
Tu'utu'uni Ngaue 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 11 ‘o Novema 2019, 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, ki hono tuku atu ‘a e ngaahi nō ki tu’a ke ne faka‘ai‘ai mo pātoloaki ‘a e tupu faka‘ekonōmika ‘a e fonua´.
- Ke kei 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 kei 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; pea
- 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 he peseti ‘e 5.
Na‘e fakahā ‘e he Kōvana ‘o e Pangikē Pule´, Sione Ngongo Kioa, ’oku kei fetō’aki pē ‘a e tupu e ngaahi ngāue faka‘ekonōmika fakalotofonua´ ‘i he māhina Sepitema 2019. Na’e liunga ua ‘a e tupu fakakātoa ‘o e ika mo e me’atahi ‘oku uta fakatau atu ki tu’apule’anga ‘i he māhina´, ‘a ia ko e tupu ‘aki ‘a e toni ‘e 344.8, ‘a ia ko e lahi taha´ ko e ika ko e valu na e uta ki tuápuleánga. Kaekehe, ‘oku hā mai ‘a e holo ‘a e pa’anga hū mai mei hono uta atu ki muli ‘a e ngoue´, neongo ‘oku ‘i ai ‘a e fakalakalaka ‘i he lahi ‘o e me’akai fakalotofonua´ mo e kava Tonga´, ‘a ia ‘oku ‘ilonga ia ‘i he ma’ama’a ange hono totongi´. ‘I he vakai ki he sekitoa fakatupu koloa´ ‘oku ki’i māmālie ange, ‘oku holo ‘a e ngaahi nō ki he sekitoa langa´, keli’anga koloa mo e maka´ (mining & quarrying), ngāue fa’u koloa´ (manufacturing) mo e ngaahi fiema’u faka’api´ (utility). Na’e holo foki mo e lahi ‘o e nō fale taautaha´ ‘i Sepitema, kā na’e tupu ia ‘i he lolotonga ‘o e ta’u´. ‘Oku kei fetō’aki pē ‘a e tupu ‘i he tafa’aki ‘o e ngaahi ngāue´, ‘a ia na’e holo ‘a e tokolahi ‘o e kau folau mei tu’apule’anga ne tū’uta mai ki Tonga´ ni mo e kau folau ‘oku nau mavahe atu ki tu’apule’anga ‘i Sepitema, kae hiki hake ‘a e lahi ‘o e ngaahi koniteina na’e lesisita´. ‘Oku kei holo pe ‘a e lahi ‘o e ngaahi me’alele na’e lesisita´.
‘Oku fakafiemālie pē ‘a e fai fatongia ‘a e ngaahi pangikē fakakomēsiale´, ‘o poupou ki ai ‘a e mālohi fe‘unga á e ivi ‘enau pa‘anga ngāue´, pehē ki he‘enau ngaahi tupu´ (profits). Na‘e holo ‘a e lahi ‘o e ngaahi nō ne tuku atu´ ‘i hono fakahoa ki he lahi ‘o e ngaahi fakahū pa‘anga´ (loans/deposit ratio), ki he peseti ‘e 78.6 mei he peseti ‘e 79.0 ‘i he māhina kuo ‘osi΄, ‘o makatu’unga mei he lahi ange ‘a e holo ‘o e ngaahi nō kuo tuku atu´, ‘i he holo ‘o e fakahū pa’anga΄. Neongo ‘oku ofi pē eni ‘i he peseti ‘e 80 kuo tu‘utu‘uni ‘e he Pangikē Pule´, kā ‘oku mahino mai ‘oku kei toe lahi pē ‘a e hulu ‘i he pa’anga ngāue (liquidity) ‘a e ngaahi pangikē ‘a ia ‘oku malava ke kei nō atu ki tu’a´. Na‘e holo ‘a e ‘avalisi ‘o e totongi tupu ‘i he nō mo e fakahū pa’anga´ (weighted average interest rate spread) ki he peseti ‘e 6.06 koe’uhi´ ko e holo ‘a e totongi tupu ‘i he nō (lending rates) fakataha mo e kake ‘a e totongi tupu ‘i he fakahū pa‘anga´ (deposit rates).
Na‘e holo hifo ‘a e tu‘unga ‘o e pa‘anga talifaki ‘i muli´ (foreign reserves) ‘i Sepitema ‘aki ‘a e $0.9 miliona ki he $490.8 miliona (fe‘unga mo e māhina ‘e 7.9 ‘o e koloa mo e ngaahi ngāue hū mai mei muliˊ). Na‘e makatu‘unga ‘a e holo ko eni΄ mei he lahi ange ‘a e fakafetongi pa’anga muli ‘a e ngaahi pangikē fakakomēsiale´ ki he ngaahi totongi pa’anga muli ‘a ‘enau kau kasitoma´ ‘i he lolotonga ‘o e māhina´. ‘I he lolotonga ‘o e ta’u´, na’e kake ‘a e pa’anga talifaki ‘i muli´ ‘aki ‘a e $38.7 miliona, tupu pea mei he lahi ‘a e ngaahi pa’anga hū mai ki he tokoni fakapatiseti ‘a e pule’anga´, pa’anga tokoni ki he ngaahi poloseki´, mo e talafi pa’anga taautaha mei muli´.
Na‘e holo ‘a e tu’unga ‘o e totongi koloa fakalukufua΄ ‘i he māhina Sepitema´ ‘aki ‘a e peseti ‘e 0.1, ‘o makatu’unga pea mei he holo ‘a e ngaahi totongi koloa fakalotofonua´, ‘o kau ai ‘a e totongi ‘o e kava Tonga´ mo e me’akai fakalotofonua´ hangē ko e ngoue foha´ mo e vesitapolo´. Kaekehe, na’e kei hiki pē ‘a e totongi koloa hū mai mei muli΄ ‘o makatu’unga í he hiki ‘a e ngaahi totongi lolo´ mo e koloa me’akai hū mai´. ‘I he vakai ki he tu’unga fakata’u΄, na’e tupu ‘a e tu’unga hikihiki ‘o e totongi koloa΄ ’aki e peseti ‘e 0.4, ‘o fakahoa ki he holo peseti ‘e 0.1 ‘i ‘Aokosi 2019, mo e tupu peseti ‘e 5.5 ‘i Sepitema 2018. Ko e hiki fakata’u ko eni΄ na’e tupu ia mei he lahi ange ‘a e hiki e totongi ‘o e ngaahi koloa hū mai mei muli΄ ‘i he holo ‘i he totongi ‘o e ngaahi koloa fakalotofonua΄.
‘Oku fakafuofua ‘e he Pangikē Pule´ ‘e fakalakalaka pē kimu’a ‘a e tu’unga faka’ekonōmika ‘a e fonua´ ‘i he kaha’u vave mai´. Kā ‘e malava uesia ‘a e fakafuofua ko ‘eni´ mei he ngaahi feliuliuaki ‘i he tu’unga ‘o e ‘ea´ pea mo e fetō’aki ‘a e tu’unga faka’ekonōmika fakamamani lahi΄. Ko e pa‘anga talifaki ‘i mulí´ ‘oku fakafuofua ‘e kei ‘i he tu’unga fakafiemālie pē, pea ‘oku ‘amanaki ko e hikihiki ‘i he totongi koloaˊ ‘e ‘ikai ma’olunga ange he peseti ‘e 5. Ko e ngaahi pangikē ‘oku fakafuofua ‘e ‘i he tu‘unga fakafiemālie pē mo ‘enau ngaahi ngāue΄. Makatu‘unga pea mei´ he ngaahi fakamatala kuo fakahā atu ‘i ‘olunga´, ‘oku kei taau ke hokohoko atu pē ‘a e ngaahi tu‘utu‘uni ngāue fakapa‘anga lolotonga´. ‘Oku kei fakahoko pē ‘e he Pangikē Pule´ hono siofi ke fakahoko ha ngaahi fokotu‘utu‘u ngāue ke faka‘ai‘ai ‘a hono ngāue’aki ‘a e hulu ‘i he pa’anga ngāue ‘a e ngaahi pangikē, ki hono nō atu ke tokoni ki he ngaahi ngāue faka’ekonōmika fakalotofonua´, pea ke poupou mo pātoloaki ha tupu faka‘ekonōmika ‘oku ma‘uma‘uluta mo tolonga. ‘Ikai ngata ai´, ka ‘oku tokanga aipē ‘a e Pangikē Pule´ ki hono muimui‘i ofi e ngaahi fakalakalaka faka‘ekonōmika fakalotofonua´ mo fakatu‘apule‘anga´, mo tu‘u mateuteu ke liliu ‘a e ngaahi fokotu‘utu‘u ngāue fakapa‘anga´ ‘o ka fiema‘u.
