The National Reserve Bank of Tonga’s Board of Directors at its first meeting of the year, on the 17th January 2019, 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 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, presented an update on the status of the economy which pointed to a positive trend in November, however growing at a slower pace compared to that in October. Total agricultural export volumes continue to increase in November by 87.7% compared to a 109.4% growth in October. This was due to higher export of squash and fruit produce such as watermelon and breadfruit contributed to the monthly rise in exports for November. Loans extended to the secondary sector rose which indicates that we can expect more activities and growth within the industry. Construction loans increased by 1.1% compared to 9.6% in October 2018. New commitment loans to the individual housing sector increased whilst loans extended to businesses for construction and manufacturing purposes also increased. Container registrations rose in November mainly private container registrations which indicates a busy informal sector and households preparing for the upcoming festive season. However, travel receipts declined in November coinciding with a decline in the number of flight arrivals although the number of international air arrivals remained the same. Consumption activities remained strong supported by a 14.8% increase in new commitments for personal loans though much lower than a (33.3%) increase last month. Remittances declined over the month by $0.6 million.
The banking system continued to remain sound over November 2018 as banks maintained a strong capital position, supported by adequate profits despite a slight decline. Non-performing loans improved over the month. Lower deposits by the commercial banks to the Reserve Bank’s vault led to a decline in reserve money. The fall in deposits is reflected in the banks’ total loans to deposit ratio which increased from 73.3% in the previous month to 74.9% in November. However, this ratio continues to remain below the 80% minimum loan to deposit ratio which indicates that there is capacity for further lending by the banks. The weighted average interest rate spread narrowed over the month due to a decline in the weighted average lending rate.
The foreign reserves increased over the month to $468.7 million as a result of increases in official receipts particularly directed to Government for budget support purposes and funded projects. This is sufficient to cover for 7.4 months of imports.
A monthly deflation was recorded over the month of November due to declines in domestic food, imported food, and imported fuel prices. The headline inflation, however, rose over the year by 6.5% compared to 6.2% in October 2018. Higher prices over the year were noted for domestic food, tobacco, alcoholic beverages, kava-Tonga, clothing and catering services and imported alcoholic beverages & tobacco, petroleum, clothing & footwear, and liquid petroleum gas.
Tonga’s economic performance remains positive in the medium term, however weather uncertainty pose a risk to the outlook. The foreign reserves are projected to remain at a comfortable level and inflation is likely to decline further. The banking system is to continue to remain strong.
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 utilisation of the excess liquidity in the banking system to increase lending to support domestic economic activities and strengthen the monetary policy transmission mechanism. 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 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 fuofua fakataha ‘o e ta’u 2019, ‘i he ‘aho 17 ‘o Sanuali 2019, 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 lelei ‘a e ngaahi ngāue faka’ekonōmika´ ‘i he lolotonga ‘o e māhina Nōvemaˊ, neongo na‘e tupu māmālie ’o fakahoa ki he māhina ko ‘Okatopa´. Na‘e hokohoko atu ai pē ‘a e tupu ma‘olunga ‘a e lahi ‘o e ngoue na’e uta atu ki muli´ ‘aki ‘a e peseti ‘e 87.7 ‘o fakahoa ki he tupu peseti ‘e 109.4 ‘i ‘Okatopaˊ. Na’e makatu’unga ‘eni mei he lahi ange ‘a hono hū atu ‘o e ngoue hina´ ‘i Nōvema pea pehē ki he ngaahi fua’i‘akau´ ‘o hangē ko e meleniˊ mo e meiˊ. Na’e tupu mo e ngaahi nō na’e tuku atu ki he sekitoa fakatupu koloa´ (secondary sector) ‘o hā mahino mei heni ‘a e fakafuofua ‘e tupu mo toe lahi ange ‘a e ngaahi ngāue ‘i he sekitoa ni. Na’e tupu ‘a e ngaahi nō ki he tafa’aki langa fakapisinisi´ ‘aki ‘a e peseti ‘e 1.1 ‘o fakahoa ia ki he peseti ‘e 9.6 ‘i ‘Okatopa 2018. Na’e toe tupu mo e ngaahi nō fo’ou ki he nō fale taautaha´ pea mo e nō fakapisinisi ‘o fakataumu‘a ki he langa fale´ pea mo e fo‘u koloa´ (manufacturing). Na’e hiki hake ‘a e lahi ‘o e ngaahi koniteina na’e lesisita ‘i Novema´, ‘o tautautefito ki he ngaahi koniteina taumu‘a fakataautaha´ ‘o hā mahino ai ‘a e femou’ekina e sekitoa fefakatau’aki fakataautaha´ ‘o ‘ikai fakafou ‘i he maketi´ pea ‘oku mahino mei heni ‘a e teuteu ‘a e kakai´ ki he ngaahi kātoanga (festive season) ‘i he ngaahi māhina ka hoko´. Na‘e holo ‘a e pa‘anga hū mai mei he fefolau‘aki΄ ‘o fenāpasi ia mo e holo e lahi ‘a e vakapuna ne tū’uta mai ki Tongaˊni mei tu‘apule‘anga´ neongo na‘e ‘i he tu’unga tatau pē ‘a e tokolahi ‘o e kakai na’e tū‘uta mai ki Tonga΄ni. Na‘e tokoni’i ‘e he tupu peseti ‘e 14.8 ‘a e ngaahi nō fo’ou fakataautaha´, neongo na’e ma’ulalo ange ‘i he tupu peseti ‘e 33.3 ‘o e māhina kuo’osi´, ke toe mālohi ange ai ‘a e ngaahi fefakatau’aki fakatau koloa´. Na’e holo mo e talafi pa’anga mai mei muli´ ‘aki ‘a e $0.6 miliona ‘i Nōvema.
‘Oku kei ‘i he tu‘unga lelei pē ‘a e fai fatongia ‘a e ngaahi pangikē fakakomēsiale´ ‘i he māhina ko Nōvema 2018, ‘o makatu‘unga meiˊhe lahi ange ‘a ‘enau pa’anga ngāue´, tu‘unga fakafiemālie ‘a ‘enau tupu´ (profitability), neongo na’e holo. Na’e fakalakalaka ‘a e tu‘unga ‘a e ngaahi nō ‘oku palopalema´ ‘i Nōvema. Na‘e holo ‘a e fakahū pa’anga ‘a e ngaahi pangikē fakakomēsiale ki he Pangikē Pule´ ‘o fakatupunga ai e holo ’i he pa‘anga ngāue (reserve money). Na’e holo e fakahū pa’anga´ ‘o makatu’unga mei ai e tupu ‘a e lahi ‘o e ngaahi nō ‘i hono fakahoa ki he lahi ‘o e ngaahi fakahū pa‘anga´ (loans/deposit ratio) mei he peseti ‘e 73.3 ‘i he māhina kuo’osi´ ki he peseti ‘e 74.9 ‘i Nōvema. Kaekehe, ‘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 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 mo 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) ‘o makatu‘unga meiˊhe holo ‘i he ‘avalisi ‘o e totongi tupu ‘i he nō (weighted average lending rate).
Na‘e hiki hake ‘a e pa’anga talifaki ‘i muli´ (foreign reserves) ki he $468.7 miliona ‘o makatu‘unga meiˊ he lahi ange ‘a e pa‘anga hū mai faka’ofisiale´, ‘a ia na’e fakataumu’a mai ki he pule’anga´ ke tokoni ki he’enau patiseti´ pea pehē foki ki he ngaahi polōseki´. ‘Oku fe‘unga ‘a e tu‘unga lolotonga ‘o e pa‘anga talifaki´ pea mo e māhina ‘e 7.4 ‘o e koloa mo e ngaahi ngāue hū mai mei muliˊ.
Na‘e holo ‘a e totongi koloa fakalūkufua´ ‘i Nōvema makatu‘unga mei he ma’ulalo ange ‘a e totongi ‘o e me‘akai fakalotofonua, me’akai hū mai mei muli´, mo e totongi lolo΄. Ka neongo iaˊ, na‘e hiki hake ‘a e totongi fakalūkufua ‘o e ngaahi koloa fakata’u´ ki he peseti ‘e 6.5 ‘o fakahoa ki he peseti ‘e 6.2 ‘i ‘Okatopa 2018. Na‘e ílonga e hikihiki ‘o e totongi koloa fakalotofonua΄ mei he totongi ‘o e me’akai fakalotofonua´, tapaka´, kava malohi´, kava-Tonga΄, koloa vala΄ mo e sevesi ‘o e ngāue faka-keita΄. Ko e ngaahi koloa hū mai mei muli na’e hiki ‘a hono totongi΄ na’e kau ki ai ‘a e totongi lolo´, tapaka´, kava malohi΄, kasa´ (liquid petroleum gas) pea mo e koloa sū mo e vala´.
‘Oku fakafuofua ‘e he Pangikē Pule´ ‘e kei tupu pe ‘a e tu’unga faka’ekonōmika ‘a e fonua´ ‘i he kaha’u´, kā ‘e ala uesia ‘a e fakafuofua ko ‘eni´ mei he ngaahi feliliuaki e ‘ea´. Ko e pa‘anga talifaki ‘i mulí ‘oku fakafuofua ‘e kei ‘i he tu’unga fakafiemālie pē pea ‘e holo ‘a e hikihiki ‘i he totongi koloaˊ. ‘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´. ‘Oku kei fakahoko pe ‘e he Pangikē Pule´ hono siofi ke fakahoko ha ngaahi fokotu‘utu‘u ngāue ‘o fakataumu’a ke ngāue’aki ‘a e hulu ‘i he pa’anga ngāue ‘a e ngaahi pangikē ‘aki hono faka‘ai‘ai e ngaahi pangikē ke toe fakalahi ‘a e ngaahi nō ‘oku tuku atu ki he kakai΄ ke poupou mo pātoloaki ha tupu faka’ekonōmika ‘oku ma’uma’uluta mo tolonga. Pea ‘e kei hokohoko atu ai pē ‘a e tokanga ‘a e Pangikē Pule´ ki hono 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.
