The National Reserve Bank of Tonga’s board of directors at its meeting on the 15th February 2018 approved to maintain its current monetary policy measures outlined below. This is to encourage utilisation of the excess liquidity in the banking system, through further lending, particularly to the growth sectors, 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% effective in July 2017; and
- maintain the inflation reference rate at 5%.
The Governor of the Reserve Bank, Sione Ngongo Kioa, reported that the performance of all sectors of the domestic economy was favorable except for the agricultural sector recording lower export volume in December 2017. The on-going construction activities continued to boost performance in the secondary sector, which coincided with a growth in individual housing loans and loans for business construction respectively. The tertiary sector improved over the month, supported by the continuous increase in total lending. Total air arrivals increased as people travelled for vacation and to spend Christmas with their respective families, which is in line with a rise in travel receipts. In addition, total number of container registrations increased driven by rise in both private and business containers. Similar to previous years, total vehicle registrations rose due to higher light and heavy vehicles and cars registered. Electricity production slightly increased and more customers were recorded during the month. Agricultural exports, on the other hand, declined largely due to the end of the squash season.
The banking system remained sound maintaining strong capital position, supported by comfortable profitability, and non-performing loans continued to remain low. Liquidity in the banking system (reserve money) fell over December, driven by a decline in deposits by the commercial banks to the Reserve Bank vault. The banks’ total loans to deposit ratio increased which reflected an increase in total lending outweighing the rise in total deposits. This continues to remain below the minimum loan to deposit ratio of 80% which indicates excess liquidity in the banking system remains and that there is capacity for further lending by banks. The weighted average interest rate spread narrowed over December to 5.784%. This resulted from a decline in the weighted average lending rate coupled with an increase in the weighted average deposit rate.
The foreign reserves declined to $422.5 million in December 2017 due mainly to higher import payments. This is equivalent to 7.8 months of import cover, which is still above the Reserve Bank’s minimum range of 3 – 4 months.
The annual headline inflation rose by 5.5% over the year to December 2017. Imported prices rose due to higher prices of imported food, tobacco, and petroleum prices. These included imported commodities such as fruits & vegetables, lamb flaps, chicken pieces, flour, Winfield blue cigarettes, petrol and diesel. The local component of inflation also rose which was attributed to the rise in prices of electricity, kava-Tonga, house maintenance services, and seasonality of local food.
The Reserve Bank in its August 2017 Monetary Policy Statement expected a strong real GDP growth of 4.0% in 2017/18, higher than the 3.4% growth projected by the IMF Article IV mission in September 2017. The level of foreign reserves is also expected to remain at comfortable levels supported by expected higher receipts of remittances and foreign aid. This will be partially offset by the projected rise in imports. Upward inflationary pressure remains in the near term, however it is expected to fall below the Reserve Bank’s inflation reference rate of 5% per annum in 2017/18. The adverse weather conditions and higher import prices pose a risk to these favorable projections.
The Governor concluded that the Reserve Bank will continue to closely monitor developments in the domestic and global economy and update its monetary policy setting, to maintain internal and external monetary stability, and to promote a sound and efficient financial system in order to support macroeconomic stability and economic growth. The Reserve Bank will also remain vigilant and continue to closely monitor developments for early signs of vulnerabilities which may indicate overheating of the economy.
Tu’utu’uni ki he Fokotu’utu’u Ngāue Fakapa’anga
Na’e tali ‘e he Poate ‘a e kau Talēkita ‘a e Pangikē Pule Fakafonua ‘o Tonga´ hili ‘enau fakataha ‘i he ‘aho 15 ‘o Fepueli 2018, ke kei hokohoko atu ai 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, ‘o fakafou mai ‘i 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 pe hono ta’etotongi tupu ‘a e pa’anga ngāue ‘a e ngaahi pangiké (Exchange Settlement Account) ‘oku fakahū ‘i he Pangikē Pulé;
- Ke ‘oua e toe ma’ulalo hifo he pēseti ‘e 80 ‘o e lahi e ngaahi nō ‘oku tukuatu ‘ehe ngaahi pangike ‘o fakahoa ki he lahi ‘o ‘enau ngaahi fakahū pa’angá (loan/deposit ratio);
- Ke hiki hake e lahi ‘o e pa’anga ‘a e ngaahi pangiké fakakomesiale, ‘oku tu’utu’uni fakalao ke tauhi ‘i he Pangikē Pulé (Statutory Reserve Deposit) ‘i he pēseti ‘e 10 ‘o kamata ‘i Siulai 2017; pea
- Ke tu’uma’u pē ‘a e fakaámu ki he hikihiki e totongi ‘o e ngaahi koloá ‘i he pēseti ‘e 5 ‘i he ta’u.
Na’e fakahā ‘e he Kōvana ‘o e Pangikē Pule´, Sione Ngongo Kioa, na’e ‘i he tu’unga lelei pē ‘a e ngaahi ngāue faka’ekonōmika´ ‘i Tisema 2017 tuku kehe pē ‘a e holo ‘a hono hū atu e ngoue ki muli´. ‘Oku hokohoko atu ai pē ‘a e tokoni ‘a e ngaahi ngāue langa ‘oku lolotonga fakahoko´ ki he tupu ‘i he sekitoa ‘o e fakatupu koloa´ (secondary sector), ‘o fenāpasi ia mo e tupu ‘i he nō taautaha ki he langa fale´ pea pehē ki he nō langa ‘a e ngaahi pisinisi´. Na’e tokoni ‘a e tupu ‘i he ngaahi nō kuo tuku atu´ ki he fakalakalaka ‘i he sekitoa ki he ngaahi ngāue (tertiary sector). Na‘e hiki hake ‘a e tokolahi ‘o e kakai ne tu‘uta vakapuna mai ki Tonga ni mei tu‘apule‘anga ko e taumu‘a ‘eve‘eva mo e kilisimasi mo honau ngaahi takitaha famili, ‘o fenāpasi ia mo e lahiange ‘a e pa‘anga hū mai mei he fefolau‘aki´. Na‘e toe hiki hake mo e lahi ‘a e ngaahi koniteina na‘e lesisita´ ‘o makatu‘unga mei he lahiange ‘a e ngaahi koniteina ‘oku fakataumu‘a ki he pisinisi´ pea mo e ngaahi koniteina fakataautaha´. Na‘e hiki hake lahi ‘o e ngaahi saliote misini na‘e lesisita ‘i he lolotonga ‘o e māhina´, ‘a ia ‘oku anga maheni pe ki he mahina tatau ‘o e ngaahi ta‘u kimu‘a΄. Na‘e tupu mo hono ngāue‘aki ‘o e ‘uhila´ (electricity consumption) pea toe tokolahi ange mo e kau ma’u ‘uhila (consumers) na‘e lekooti ‘i he lolotonga ‘o e māhina. Kaekehe, na‘e holo ‘a e lahi ‘o e ngoue ne uta atu ki tu‘apule‘anga ‘o makatu‘unga mei he ‘osi ‘a e to‘u hina΄.
‘Oku kei ‘i he tu‘unga lelei ‘aupito ‘a e fai fatongia ‘a e ngaahi pangikē fakakomēsiale´, ‘o makatu‘unga mei he tu‘unga fakafiemālie ‘a ‘enau tu‘unga tupu´ (profitability) pea pehē ki he kei ‘i he tu‘unga mā‘ulalo ai pē ‘a e ngaahi nō ‘oku palopalema´. Na‘e holo ‘a e pa‘anga ngāue (liquidity) ‘a e ngaahi pangikē ‘i Tisema, makatu’unga mei he holo ‘a e fakahū pa‘anga ‘a e ngaahi pangikē ki he Pangikē Pule´. Na’e lahiange ‘a e ngaahi nō ‘i hono fakahoa ki he lahi ‘o e ngaahi fakahū pa‘anga´ (loans/deposit ratio) ‘o makatu’unga eni mei he lahiange ‘a e tupu ‘i he ngaahi nō fakahoa ki he tupu ‘i he ngaahi fakahū pa‘anga´. ‘Oku kei ma’ulalo pē ‘eni ‘i he tu’unga kuo tu’utu’uni ‘e he Pangikē Pule´ ke a’usia ‘e he ngaahi pangikē, ‘a ia ko e peseti ‘e 80. ‘Oku hā mahino mei heni ‘a e kei ‘i ai pē ‘a e faingamālie ke toe fakalahi ‘a e ngaahi nō ke tuku atu ‘e he ngaahi pangikē. Na’e holo ‘a e hulu ‘i he ‘avalisi ‘o e totongi tupu ‘i he nō mo e ‘avalisi ‘o e totongi tupu ‘i he fakahū pa’anga´ (weighted average interest rate spread) ‘i Tisema ki he peseti ‘e 5.784. Na‘e makatu‘unga eni mei he holo ‘a e ‘avalisi ‘o e totongi tupu ‘i he nō (weighted average lending rate) pea pehē foki ki he hiki ‘a e ‘avalisi ‘o e totongi tupu ‘i he fakahū pa’anga´ (weighted average deposit rate).
Na‘e holo ‘a e pa’anga talifaki ‘i muli´ (foreign reserves) ki he $422.5 miliona ‘i Tisema 2017 makatu‘unga mei he lahiange ‘o e totongi pa‘anga ki he hū koloa mai mei muli΄. ‘Oku fe‘unga ‘a e tu‘unga lolotonga ‘o e pa‘anga talifaki´ pea mo e māhina ‘e māhina ‘e 7.8 ‘o e koloa mo e ngaahi ngāue hū mai mei muli´. ‘Oku kei ma’olunga pē eni ‘i he tu’unga ma’ulalo taha ‘oku fiema’u ‘e he Pangikē Pule´, ‘a ia ko e māhina ‘e 3 ki he 4 ‘o e koloa mo e ngaahi ngāue hū mai mei muli´.
Na‘e peseti ‘e 5.5 ‘a e hikihiki ‘i he totongi fakalukufua ‘o e koloa΄ ‘i he ta‘u ko ia ki Tisema 2017. Ko e hikihiki ‘i he totongi koloa hū mai mei muli΄na‘e makatu‘unga ia mei hiki hake ‘a e totongi ‘o e koloa me‘akai΄, tapaka, pea mo e totongi lolo΄. Na‘e kau ki heni ‘a e ngaahi koloa hangē ko e fuluti & vesitapolo, kapakapa‘i sipi, kongokonga moa΄, mahoa΄a, sikaleti Winfield blue, penisini΄ pea mo e tisolo΄. Ko e hikihiki ‘i he totongi koloa fakalotofonua΄ na‘e makatu‘unga ia mei he hiki ‘a e totongi ‘o e ‘uhila΄, kava-Tonga΄, ngaahi ngāue ki he fakalelei ‘api nofo‘anga΄, pea mo e fetō’aki ‘o e ngaahi to‘ukai΄ ‘o e me‘akai fakalotofonua΄.
Na‘e tuku atu ‘e he Pangikē Pule΄ ‘i he Fakamatala Fokotu‘utu‘u Ngāue Fakapa‘anga ‘o ‘Aokosi 2017 ‘a e fakafuofua ke peseti ‘e 4.0 ‘a e tupu faka‘ekonomika totonu ‘a ia ‘oku ma‘olunga ia ‘i he peseti ‘e 3.4 na‘e fakafuofua ‘e he timi ‘a‘ahi ‘Atikolo IV ‘a e Kautaha Pa‘anga Fakavaha‘apule‘anga ‘i Sepitema 2017. Ko e pa‘anga talifaki ‘i mulí ‘oku fakafuofua ‘e kei ‘i he tu’unga fakafiemālie pē. ‘Oku makatu’unga eni mei he fakafuofua ‘e kei ‘i he tu’unga mā’olunga ai pē ‘a e ngaahi talafi pa’anga mei mulí pea pehē ki he pa’anga tokoni mei he ngaahi hoa ngāue langa fakalakalaká, neongo ‘e ala uesia ‘a e fakafuofua ko ‘eni΄ mei he fakafuofua ‘e toe lahi ange mo e totongi ‘o e koloa hū mai mei mulí. ‘Oku toe fakafuofua ‘e kei hokohoko atu ai pē ‘a e hikihiki ‘i he totongi koloá ‘i he kaha’u vave maí pea ke toki holo ki he tu’unga fe’unga ko e pēseti ‘e 5 ‘i he fakafuofua ‘a e Pangikē Pulé (reference rate) ‘i he 2017/18. Ka neongo ia ‘oku malava ke uesia ‘a e ngaahi fakafuofua ko ’eni mei he feliliuaki ‘o e ‘ea΄, pea mo ha toe ma’olunga ange ‘a e totongi koloa hū mai mei mulí.
Na‘e aofangatuku ‘e he Kovana΄, ‘e kei hokohoko atu ai pē ‘a e tokanga ‘a e Pangikē Pulé ki hono siofi mo muimui‘i ofi e ngaahi fakalakalaka faka’ekonōmika fakalotofonuá mo tu‘apule‘angá, mo tu‘u mateuteu ke liliu ‘a e ngaahi fokotu‘utu‘u ngāue fakapa‘angá ‘o ka fiema’u, ke tauhi e ma’uma’uluta ‘a e tu’unga fakapa’angá pea pehe ki he malu mo lelei ‘o e tafa’aki fakapa’anga, pea mo fakapapau’i ‘e ‘ikai ke toe kaunga kovi ‘a e ngaahi fakalakalaka ‘oku hoko´ ki he tupu faka’ekonomika ‘oku ma’uma’uluta mo tolonga.
