The National Reserve Bank of Tonga's Board of Directors, at its board meeting on the 11th of November 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 assist the Government during COVID-19 with issuing 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 noticeable activity in the domestic economy. The primary sector recorded growth as the total agricultural export volumes rose over the month by 27.9 tonnes (3.9%), driven by higher exports of root crops. The secondary sector reported loans extended for manufacturing, utility, and mining & quarrying purposes, indicating positive activity across those industries. Meanwhile, the tertiary sector showed mixed outcomes in August 2021, with container registrations having substantially increased by 430 containers (86.3%), due to more business and private containers. This is mostly a result of delayed shipments due to rerouting of ships as Delta variant continues to break out in neighbouring countries. The tourism industry remains mostly stagnant.
Inflation increased by 0.2% during the month, mainly owing to higher imported prices. In the year to August 2021 it rose by 7.0%, driven by higher imported and domestic prices. The higher annual headline inflation is above the 5% reference rate. Higher prices for food items and electricity mainly led to the higher local prices, whilst higher imported prices were driven by higher prices for fuel, gas, and food items.
The level of official foreign reserves rose significantly over the month and in the year to August 2021 by $46.9 million and $195.6 million, respectively. This monthly rise was mostly due to an increase in capital inflow and remittances. Annually, foreign reserves increased, resulting from more receipts of budget support, project funds, and remittances.
The total banking system continues to maintain its soundness, supported by strong capital positions and excess liquidity. Total deposits increased by $7.7 million (1.0%) while total lending declined by $2.8 million (0.6%). The rise in total deposits and the decline in total lending resulted in a lower loans to deposit ratio of 58.9% in August 2021, compared to 59.8% last month and still below the 80% minimum. The weighted average interest rate spread widened over the month and year to August 2021 by 2.8 basis points and 24.7 basis points, respectively, to 5.90%.
The Reserve Bank's GDP outlook is more positive for the 2021/22 fiscal year as the global economy is expected to recover. Although there is expected inflationary pressure, it is projected to be transitory and will eventually fall below the 5% reference rate in the next 6 months. However, foreign reserves is still expected to remain at sufficient levels above the 3 months minimum threshold of import cover. 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 11 ‘o Nōvema 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 tokoni ki he Pule‘anga′ lolotonga ‘a e taimi COVID-19 ‘aki ‘a hono tuku atu ‘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, na‘e ‘ilonga pē á e fakalakalaka ‘i he ngaahi ngāue faka’ekonōmika fakalotofonua´. Na‘e hā mai ‘a e tupu ‘i he sekitoa ngoue´, vaotātaa´ mo e toutai´, makatu‘unga mei he tupu ‘aki ‘a e toni ‘e 27.9 (peseti ‘e 3.9) ‘a e ngoue na‘e uta ki tu‘apule‘anga´, tautefito ki he me‘akai foha′. Na‘e ‘ilonga e kake ‘a e ngaahi ngāue ‘i he tafa‘aki ‘o e fakatupu koloa´ ‘i he ngaahi nō ne tuku atu ki he sekitoa ngaohi koloa′, ngaahi fiema‘u faka‘api′, mo e sekitoa keli‘anga koloa mo e maka´. ‘I he taimi tatau pē, na‘e fetō‘aki ‘a e ola mei he sekitoa ‘o e ngaahi ngāue´ ‘i ‘Aokosi 2021. Na‘e lahiange ‘a e lēsisita ‘o e ngaahi koniteina mei muli´ ‘aki ‘a e koniteina ‘e 430 (peseti ‘e 85.3), tupu mei he hiki fakatou‘osi ‘a e koniteina fakapisinisi mo fakataautaha. Ne makatu‘unga ‘eni mei he liliu ‘a e ngaahi halanga ‘o e vaka uta koloa ‘e ni‘ihi koe‘uhi´ ko e mafola ‘a e kalasi é taha ó e vailasi kolona óku íloa ko e Delta variant ‘i he ngaahi fonua kaunga‘api´. ‘Oku te‘eki ai pē ke hā mai ha fakalakalaka í he tu‘unga ‘oku ‘i ai ‘a e ngaahi ngāue ‘i he takimamata´.
Na’e hiki e totongi koloa΄ ‘i he māhina´ ‘aki ‘a e peseti ‘e 0.2 ‘o makatu‘unga ‘i he ma‘olunga ‘a e totongi koloa hū mai mei muli´. ‘I he ta‘u´ ki Siulai 2021 na‘e hiki peseti ‘e 7.0 ‘a e totongi koloa fakalūkufua´, ‘o makatu‘unga mei he hiki fakatou‘osi ‘a e totongi ngaahi koloa hū mai mei muli´ mo e ngaahi koloa fakalotofonua´. ‘Oku ma‘olunga ‘eni ‘i he tu‘unga fe‘unga ko e peseti ‘e 5. Ko e hikihiki ‘a e totongi koloa fakalotofonua´ ne fakatefito ia ‘i he koloa me‘akai´, mo e totongi ‘uhila´. Ko e ma‘olunga leva ‘a e totongi koloa hū mai mei muli´, ne makatu‘unga ia ‘i he hiki ‘a e totongi lolo΄, mo e koloa me‘akai΄.
Na‘e hiki ma‘olunga ‘a e pa‘anga talifaki ‘i muli´ (foreign reserves) ‘i he māhina´ mo e ta‘u´ ki ‘Aokosi 2021, ‘aki ‘a e $46.9 miliona mo e $195.6 miliona. Ko e hiki ‘i he māhina´ na‘e makatu‘unga ia mei he ngaahi pa‘anga tefito hū mai pea mo e talafi pa‘anga taautaha mai mei muli´. Ko e kake leva ‘a e tu‘unga ‘o e pa‘anga talifaki ‘i muli´ ‘i he ta‘u´, ne makatu‘unga mei he lahi ange ‘a e ngaahi tokoni fakapa’anga ki he patiseti´, mo e ngaahi polōseki ‘a e Pule’anga´, pea mo e ngaahi talafi pa’anga taautaha mai mei hotau kainga ‘i 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 lahiange ‘a e ngaahi fakahū pa‘anga΄ he māhina´ ‘aki ‘a e $7.7 miliona (peseti ‘e 1.0) kae holo ‘a e ngaahi nō ne tuku atu΄ ‘aki ‘a e $2.8 miliona (peseti ‘e 0.6). ‘I he‘ene pehee, na‘e 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 ‘e 58.9 ‘i ‘Aokosi 2021, ‘i hono fakahoa ki he peseti ‘e 59.8 ‘i he māhina kuo‘osi´. ‘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 ‘i he māhina΄ ‘aki ‘a e poini peseti ‘e 2.8, kae hiki ‘i he ta‘u΄ ki ‘Aokosi 2021 ‘aki ‘a e poini peseti ‘e 24.7, ki he peseti ‘e 5.90.
‘I he vakai fakamuimui ‘a e Pangikē Pule΄ ki he tupu faka’ekonōmika fakalotofonua΄, ‘oku fakafuofua ‘e lelei ange ‘a e ola ‘o e ta’u fakapa‘anga 2021/22 ‘o fakatefito ‘i he fakaakeake ‘a e tu‘unga faka‘ekonōmika fakamāmani lahi΄. Neongo ‘oku ma’olunga ‘a e hikihiki ‘o e totongi koloa fakalūkufua΄ í he ta‘u´, ‘oku fakafuofua ‘e holo pē ‘a e hikihiki ‘o e totongi koloa fakalūkufua΄ ‘o ma‘ulalo ‘i he peseti ‘e 5 ‘i he māhina ‘e 6 ka hoko΄. Kaekehe, koe tu‘unga ‘o e pa‘anga talifaki ‘i mulí´ ‘oku ‘amanaki ‘e kei fakafiemālie pē ‘o lahi ange ‘i he māhina ‘e 3 ‘o e koloa mo e ngāue hū maiˊ. ‘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΄.
