The National Reserve Bank of Tonga’s board of directors at its meeting on the 15th March 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, stated that the monthly economic indicators mirrored usual trend in January of every year showing slower growth in economic activities. The supply of root crops in the domestic market were abundant whilst the supply of local fruits and vegetables declined due to seasonality. The agricultural export volume continued to fall over the month of January, due to a decrease in the export of coconuts and squash although the volume of exported root crops rose. Performance of the secondary sector slowed over the month as lending for individual housing and business manufacturing loans declined. Business construction loans, on the contrary, slightly rose. The tertiary sector slightly improved over the month, supported by the rise in total lending particularly higher lending to the trade and tourism sectors increased which may indicate a vibrant services sector. Although total air arrival passengers declined, travel receipts slightly rose.
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) slightly fell over January due mainly to the decline in currency in circulation as the commercial banks deposited cash back to the Reserve Bank vault following the busy Christmas festive month of December. The banks’ total loan to deposit ratio slightly decreased which reflected an increase in total deposits outweighing the rise in total lending. This ratio continues to remain below the 80% loan to deposit ratio target 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 January, which resulted from a rise in the weighted average deposit rate outweighing the increase in the weighted average lending rate.
The foreign reserves rose to $424.1 million in January 2018 due mainly to lower import payments. This is equivalent to 7.7 months of import cover, which is still above the Reserve Bank’s minimum range of 3 – 4 months.
The headline inflation for the month is yet to be released by the Statistics Department. However, the Reserve Bank expects the annual headline inflation rate to increase further in January 2018 to 5.7% from the 5.5% recorded in December 2017. This anticipated higher inflation rate is due to higher expectations in the prices of food, transportation, alcohol, electricity and kava-Tonga.
While the outlook is promising in the years ahead as projected by the Reserve Bank in its August 2017 Monetary Policy Statement, this growth outlook is affected by the Tropical Cyclone Gita. 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 and expected to remain above the Reserve Bank’s inflation reference rate of 5% per annum in 2018. 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 Ma’asi 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 mei he Saikolone ko Kita (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 holo ‘a e ngaahi ngāue faka’ekonōmika ‘i Sanuali 2018ˊ ‘i hono fakahoa ki Tisema, ‘a ia ko e tu’unga angamaheni pe ia ‘i Sanuali ‘o e ta’u kotoa. Na’e lahi ‘a e ngaahi ngoue foha´ ‘i he māketi fakalotofonua´ kae holo ‘a e lahi ‘o e vesitapolo´ mo e ngaahi fua’i ‘akau´, makatu’unga mei he fetō’aki ‘a e ngaahi to’ukai´. Na‘e hokohoko ai pē ‘a e holo ‘a e lahi ‘o e ngoue ne uta atu ki tu‘apule‘anga´ ‘o makatu‘unga mei he holo ‘a hono uta atu ‘o e niu´ pea mo e ‘osi atu ‘a e to‘u hina΄, ka na’e kei lahi pe ‘a hono hū atu ki tu’apule’anga ‘a e ngoue foha´. Na’e toe holo foki mo e ngaahi ngāue ‘i he sekitoa ‘o e fakatupu koloa´ (secondary sector), tupu mei he holo ‘i he lahi ‘o e nō kuo tuku atu ki he langa fale taautaha´ pea mo e nō kuo tuku atu ki he ngaahi pisinisi ‘oku nau fa’u koloaˊ (manufacturing) neongo na’e toe lahiange ‘a e nō kuo tuku atu ki he ngaahi pisinisi langa´. Na’e tokoni ‘a e tupu ‘i he ngaahi nō kuo tuku atu ki he sekitoa fefakatau’aki´ (trade) pea mo e takimamata´ (tourism) ki he fakalakalaka ‘i he sekitoa ki he ngaahi ngāue (tertiary sector). Neongo na’e holo ‘a e tokolahi ‘o e kakai ne tu‘uta vakapuna mai ki Tonga ni mei tu‘apule‘anga´, kā na’e tupu ‘a e pa‘anga hū mai ia mei he fefolau‘aki´.
‘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 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 Sanuali, makatu’unga mei he holo ‘a e pa’anga ‘oku lolotonga ngāue’aki´ (currency in circulation). Na’e makatu’unga eni mei he toe lahiange ‘a e fakahū pa‘anga ‘a e ngaahi pangikē ki he Pangikē Pule´, hili ia ‘a e māhina femou’ekina ‘o Tisema. Na’e holo ‘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 fakahū pa‘anga´ ‘i he ngaahi nō kuo tuku atu´. ‘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 Sanuali. Na‘e makatu‘unga eni mei he holo ‘a e ‘avalisi ‘o e totongi tupu ‘i he fakahū pa’anga´ (weighted average deposit rate) ‘i hono fakahoa ki he hiki ‘a e ‘avalisi ‘o e totongi tupu ‘i he nō (weighted average lending rate).
Na‘e tupu ‘a e pa’anga talifaki ‘i muli´ (foreign reserves) ‘o a’u ki he $424.1 miliona ‘i Sanuali 2018, makatu‘unga mei he si’isi’i ange ‘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 7.7 ‘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΄, kā ‘oku fakafuofua ‘e he Pangikē Pule ‘e tupu ‘aki e peseti ‘e 5.7 ‘i Sanuali 2018 ‘o fakahoa ki he tupu peseti ‘e 5.5 ‘i Tisema 2017. 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, kava-malohiˊ (alcohol), ‘uhilaˊ pea mo e kava-Tongaˊ.
Na’e fakafuofua ‘e he Pangikē Pule΄ ‘i he’ene Fakamatala Fokotu‘utu‘u Ngāue Fakapa‘anga ‘o ‘Aokosi 2017 ‘e tupu mālohi ‘a e tu’unga totonu ‘o e tupu faka’ekonōmika, ka ‘e uesia eni ‘e he matangi Saikolone ko Kita. 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 lahiange 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 koloaˊ ‘i he kaha’u vave maiˊ pea ‘e lahi hake ‘i he tu’unga fe’unga ko e pēseti ‘e 5 ‘i he fakafuofua ‘a e Pangikē Puleˊ (reference rate) ‘i he toenga ‘o e 2018. Ka neongo iaˊ ‘oku malava ke uesia ‘a e ngaahi fakafuofua ko ’eniˊ 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 Puleˊ ki hono siofi mo muimui‘i ofi e ngaahi fakalakalaka faka’ekonōmika fakalotofonuaˊ mo tu‘apule‘angaˊ, mo tu‘u mateuteu ke liliu ‘a e ngaahi fokotu‘utu‘u ngāue fakapa‘angaˊ ‘o ka fiema’u, ke tauhi e ma’uma’uluta ‘a e tu’unga fakapa’angaˊ pea pehē ki he malu mo lelei ‘o e tafa’aki fakapa’angaˊ, pea mo fakapapau’i ‘e ‘ikai ke toe kaunga kovi ‘a e ngaahi fakalakalaka ‘oku hoko´ ki he tupu faka’ekonōmika ‘oku ma’uma’uluta mo tolongaˊ.
