The National Reserve Bank of Tonga’s board of directors at its meeting on the 15th June 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 the recovery from Tropical Cyclone Gita, 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 economic activities within the primary and secondary industries proved to be largely favourable. This was reflected in the higher total agricultural export volume due to higher exports of yam and taro. Additionally, loans to the construction sector increased as well as individual housing loans reflecting the consistently high demand for housing and buildings. Meanwhile, activities within the tertiary industry varied with container registrations declining over the month as a result of respective decreases in private and business containers whilst activities in the tourism sector are supported by the further rise in international air arrivals in April.
The banking system remained sound and maintained strong capital position, supported by comfortable profitability, and non-performing loans continued to remain low. Liquidity in the banking system (reserve money) decreased over April due mainly to the settlement of maturing government bonds at the end of April. The banks’ total loan to deposit ratio (including Government Development Loan (GDL) scheme) increased from last month and similarly, total loans to deposit ratio (excluding GDL) also increased in April. This ratio continued to remain below the 80% minimum loan to deposit ratio 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 widened over April, due to an increase in the weighted average lending rate and a decline in the weighted average deposit rate.
The foreign reserves slightly declined to $445.9 million in April 2018 due mainly to higher interbank payments during the month. This is equivalent to 7.9 months of import cover, which is still above the Reserve Bank’s minimum range of 3 – 4 months.
The official headline inflation rate for April 2018 is yet to be released by the Statistics Department. However, impacts of TC Gita in February weighed on domestic inflation (particularly food items) in March 2018 bringing the annual headline inflation rate to 9.8%. The Reserve Bank projects headline inflation for April 2018 to be above the 5% reference rate due to higher expectations in the prices of food, transportation, tobacco, alcohol, and Kava-Tonga, continuing to put pressure on inflation. Domestic food supply is projected to recover before end of the year after the impact of the cyclone hence inflation is anticipated to fall below the 5% reference rate per annum by the end of 2018.
Tonga’s economic growth prospects remains positive in the medium term. The level of foreign reserves is expected to remain at comfortable levels and inflation is anticipated to fall below the Reserve Bank’s inflation reference rate of 5% per annum by the end of 2018. The banking system continued to remain strong. Against this background, the Reserve Bank’s current accommodative monetary policy measures are maintained. Nevertheless, the Reserve Bank will continue to remain vigilant, closely monitor developments in the domestic and global economies and the implications on the monetary policy objectives, and 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 Sune 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´ pea mo tokoni ki he fakaakeake meiˊhe saikolone fakatalopiki ko Gita (Tropical Cyclone Gita).
- 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 tu’unga lelei pē ‘a e ngaahi ngāue faka’ekonōmika ‘i he sekitoa ‘o e ngoueˊ, toutaiˊ mo e vao’akauˊ (primary) pea mo e sekitoa ‘o e fakatupu koloa´ (secondary). Na’e hā mei heni ‘a e toe lahi ange ‘a e lahi ‘o e ngoue na’e uta atu ki tu’apule’anga´ ‘o tautautefito ki hono hū atu ‘o e ‘ufi´ mo e talo´. Na’e kake mo e nō na’e tuku atu ki he ngaahi ngāue langa´ pea pehē ki he nō langa fale taautaha´, ‘o hā mahino mei heni ‘a e toe lahi ange ‘a e fiema’u langa fale´. Na’e fetō’aki e ola ‘o e ngaahi ngāue ‘i he sekitoa ki he ngaahi ngāue´ (tertiary industry), ‘o kau ai e holo ‘a e ngaahi koniteina na’e lēsisita ‘i he lolotonga ‘o e māhina´, tupu meiˊhe fakatou holo ‘a e ngaahi koniteina taautaha´ pea mo e koniteina fakapisinisi´. Na’e tokoni ‘a e toe tokolahi ange ‘o e kakai ne tu‘uta vakapuna mai ki Tongaˊni mei tu‘apule‘anga´, ki he toe lelei ange ‘a e ngaahi ngāue ‘i he sekitoa takimamata´ ‘i ‘Epeleli.
‘Oku kei ‘i he tu‘unga lelei ‘aupito ‘a e fai fatongia ‘a e ngaahi pangikē fakakomēsiale´, ‘o makatu‘unga meiˊhe tu‘unga fakafiemālie ‘a ‘enau tupu´ (profitability) pea pehē ki he kei ‘i he tu‘unga ma‘ulalo ai pē ‘a e ngaahi nō ‘oku palopalema´. Na‘e holo ‘a e pa‘anga ngāue (liquidity) ‘a e ngaahi pangikē ‘i ‘Epeleli ‘o makatu’unga meiˊhe totongi ‘o e pōnite ‘a e Pule’angaˊ ‘i he faka’osinga ‘o e māhina´. Na’e kake e lahi ‘o e ngaahi nō (kau ki ai ‘a e polokalama nō ‘a e pule’anga´) ‘i hono fakahoa ki he lahi ‘o e ngaahi fakahū pa‘anga (loans/deposit ratio) ‘i ‘Epeleliˊ. Na’e toe hiki mo e lahi ‘o e ngaahi nō (‘ikai kau ki heni ‘a e polokalama nō ‘a e pule’anga´) ‘i hono fakahoa ki he lahi ‘o e ngaahi fakahū pa‘anga´ (loans/deposit ratio). ‘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 kake ‘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 ‘Epeleliˊ. Na‘e makatu‘unga eni meiˊhe lahi ange ‘a e kake ‘i he ‘avalisi ‘o e totongi tupu ‘i he nō (weighted average lending rate) pea mo e holo ‘a e ‘avalisi ‘o e totongi tupu fakahū pa’anga´ (weighted average deposit rate).
Na‘e holo si’i ‘a e pa’anga talifaki ‘i muli´ (foreign reserves) ki he $445.9 miliona ‘i ‘Epeleli 2018, makatu‘unga meiˊ he lahiange ‘a e totongi pa’anga fakapangikē (interbank payments) ‘i he lolotonga ‘o e māhina´. ‘Oku fe‘unga ‘a e tu‘unga lolotonga ‘o e pa‘anga talifaki´ pea mo e māhina ‘e 7.9 ‘o e koloa mo e ngaahi ngāue hū mai mei muliˊ. ‘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´.
‘Oku te’eki ke tuku mai ‘e he Potungāue Sitētisitika´ (Statistics Department) ‘a e fika ‘ofisiale ki he hikihiki ‘i he totongi fakalūkufua ‘o e koloa΄ ‘i ‘Epeleliˊ. Na’e uesia ‘a e totongi fakalotofonua´ ‘o tautautefito ki he koloa me’akai´ makatu’unga mei he Saikolone ko Gita´ ‘i Fepueli, ‘o hiki ai ‘a e totongi koloa fakalūkufuaˊ ki he peseti ‘e 9.8 ‘i Ma’asi 2018. ‘Oku fakafuofua ‘e he Pangikē Pule´ ‘e mā’olunga ‘i he peseti ‘e 5 ‘a e hikihiki fakata’u ‘i he totongi fakalūkufua ‘o e koloa΄ ‘i ‘Epeleli. Ko e hikihiki ko ‘eni´ ‘oku makatu’unga ia mei he fakafuofua ‘e toe lahiange ‘a e tupu ‘i he totongi ‘o e me’akaiˊ, fefononga’akiˊ, tapaka´, kava-malohiˊ (alcohol) pea mo e kava-Tongaˊ. ‘Oku fakafuofua ‘e toki a’u ki ha tu’unga fakafiemalie ange ‘a e lahi ‘o e me’akai fakalotofonua´ ki he faka’osinga ‘o e ta’u´, hili ia ‘a ‘ene uesia mei he saikolone´. ‘Oku fakafuofua ‘e tokoni eni ki he holo ‘a e hikihiki ‘i he totongi koloaˊ ‘o ma’ulalo ‘i he tu’unga fe’unga´ (reference rate), ‘a ia ko e pēseti ‘e 5 ‘i he faka’osinga ‘o e 2018.
‘Oku kei tu‘uma‘u pē ‘a e fakafuofua ‘e tupu mālohi ‘a e tu‘unga totonu ‘o e tupu faka‘ekonōmika ‘i he kaha’u´. Ko e pa‘anga talifaki ‘i mulí ‘oku fakafuofua ‘e kei ‘i he tu’unga fakafiemālie pē. ‘Oku toe fakafuofua ‘e ‘i he tu’unga ma’ulalo pē ‘a e hikihiki ‘i he totongi koloaˊ pea ‘e ma’ulalo pē ia ‘i he tu’unga fe’unga (reference rate) ko e pēseti ‘e 5 ‘i he faka’osinga ‘o e 2018. ‘Oku hokohoko atu ai pē ‘a e tu’unga fakafiemālie ‘a e ngaahi pangikē. Koe’uhī ko e ngaahi fakamatala ko ‘eni´, ‘e hokohoko atu ai pē ‘a e ngaahi tu’utu’uni ngāue fakapa’anga lolotonga´. ‘E kei hokohoko atu ai pē ‘a e tokanga ‘a e Pangikē Pule´ ki hono siofi mo muimui’i ofi e ngaahi fakalakalaka faka’ekonōmika fakalotofonua´ mo tu’apule’anga´, mo tu’u mateuteu ke liliu ‘a e ngaahi fokotu’utu’u ngāue fakapa’anga ‘o ka fiema’u pea mo fakapapau’i ‘e ‘ikai ke kaunga kovi ‘a e ngaahi fakalakalaka ‘oku hoko´ ki he tupu faka’ekonōmika ‘oku ma’uma’uluta mo tolongaˊ.
