The National Reserve Bank of Tonga’s Board of Directors at its first meeting, on the 18th February 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 showed that performances of various sectors within the domestic economy indicated stronger growth than the previous month. Marine exports volumes more than doubled in December as a result of more exports of tuna. The agricultural export proceeds rose mainly from squash export. The on-going construction activities continued in December and reflected a stronger performance of the secondary sector supported by growth in business construction and individual housing loans. Remittances increased in December following a decline in the previous month. This is expected to impact positively on consumption activities and further reflected in the consumption tax (CT) collected which also increased. Container registrations declined due mainly to a fall in private containers coinciding with the lower number of cargo ships that arrived in Tonga. However, the high number of container registrations for the previous months indicates that businesses were already well stocked for the month of December. Travel receipts also rose and coincided with total international air arrivals which reached its highest for the year. This reflects December being the month where we expect the most visitors for the festive season.
The banking system remained sound throughout December 2018 as banks continued to maintain a strong capital position supported by adequate profits. The banks’ total loans to deposit ratio rose from 74.9% in November to 75.1% reflecting the increase in loans for December. Despite this ratio being below the 80% minimum loan to deposit ratio, the commercial banks have respectively improved on this ratio over the year due to the active lending activities utilizing the capacity available for further lending. The weighted average interest rate spread widened in December due to a rise in the weighted average lending rate.
Net inflow from foreign exchange deals with commercial banks due to excess fund receipts from remittances, and budget support receipts pushed foreign reserves to another record high in December 2018 of $478.5 million equivalent to 7.6 months of imports cover.
The monthly deflation continued to December 2018, where the overall price level declined by 0.9% due to favorable movements in both local and imported commodity prices. Additionally, the annual headline inflation slowed to 4.8% in December 2018 after recording its highest level for the year in November at 6.5% and 6.1% in December 2017. Headline inflation is now below the reference rate after being consistently above the reference rate since July 2018.
Tonga’s economic performance remains positive in the medium term, however weather uncertainty poses 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 fakataha ‘i he ‘aho 18 ‘o Fepueli 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 toe tupu mālohi ‘a e ngaahi ngāue faka’ekonōmika´ ‘i he lolotonga ‘o e māhina Tisema 2018 ‘i hono fakahoa ki he māhina kuo maliu atu΄. Na‘e ‘ova ‘i he liunga ua ‘a e hiki hake ‘a e lahi ‘o e toutai ne uta ki muli ‘i he māhina Tisema΄ ‘o tupu eni mei he lahi ‘a hono fakatau atu ‘o e tuna΄. Na‘e tupu mo e pa‘anga hū mai mei hono uta atu ki muli ‘o e ngoue΄ ‘a ia ko e konga lahi koe pa’anga ma’u mai mei hono hū atu ‘o e ngoue hina΄. ‘Oku kei hokohoko atu pe ‘a e longomou’i e ngaahi ngāue langa΄ ‘i Tisema, ‘o tokoni eni ki he tupu ‘a e sekitoa fakatupu koloa´ (secondary sector), pea poupou ki ai ‘a e kake ‘i he lahi ‘o e ngaahi nō ki he tafa’aki langa fakapisinisi´ pea mo e ngaahi nō fale taautaha´. Na‘e hiki hake mo e talafi pa’anga mai mei hotau kainga ‘i muli´ (remittances) hili ia ‘a ‘ene holo ‘i he māhina kuo’osi΄. ‘E kaunga lelei eni ki he ngaahi ngāue fefakatau’aki koloa´, ‘a ia ‘oku hā mahino mai ‘i he toe lahi ange ‘a e pa’anga ‘oku tānaki mei he totongi tukuhau ‘oku hilifaki ‘i he koloa΄. Ko e lahi ‘o e ngaahi koniteina na’e lesisita΄ na’e holo, tautautefito ki he ngaahi koniteina taumu‘a fakataautaha´, koe’uhi´ ko e holo ‘a e lahi e ngaahi vaka uta koloa ne tū‘uta mai ki Tonga΄ ni. Kaekehe, ko e tu’unga ma‘olunga na’e ‘i ai ‘a e ngaahi koniteina na’e lesisita ‘i he ngaahi māhina kimu’a΄, ‘oku ne fakamahino mai na’e ‘osi mateuteu pē ‘a e ngaahi pisinisi΄ ki he fefakatau‘aki ‘e fakahoko ‘i Tisema΄. Na‘e kau foki mo e pa‘anga hū mai mei he fefolau‘akiˊ ‘i he hiki΄, ‘o fenāpasi ia mo e tu’unga ma’olunga taha kuo a‘u ki ai ‘a e tokolahi ‘o e kakai na’e tū‘uta vakapuna mai ki Tonga΄ni ‘i he ta‘u΄ ni. ’Oku angamaheni pē foki ki he māhina Tisemaˊ ‘e tokolahi taha ai ‘a e kau folau mai mei tu’apule’anga΄ koe’uhi ko e ngaahi teu kātoanga΄.
‘Oku kei ‘i he tu‘unga lelei pē ‘a e fai fatongia ‘a e ngaahi pangikē fakakomēsiale´, ‘o makatu‘unga meiˊ he kei lahi fe’unga pē ‘a ‘enau pa’anga ngāue´ pea ’i he tu‘unga fakafiemālie pē ‘a ‘enau tupu´ (profitability). Na’e hiki hake ‘a e peseti ‘o e ngaahi nō ‘i hono fakahoa ki he lahi ‘o e ngaahi fakahū pa‘anga´ (loans/deposit ratio) mei he peseti ‘e 74.9 ‘i Nōvema ki he peseti ‘e 75.1, tupu pea mei he lahi ange ‘o e ngaahi nō na’e tuku atu ‘i Tisema´. Neongo ‘oku kei ma’ulalo pē ‘eni ‘i he tu’unga kuo tu’utu’uni’i ‘e he Pangikē Pule´ ke a’usia ‘e he ngaahi pangikē fakakomēsiale, ‘a ia ko e peseti ‘e 80, kā ‘oku mahino mai ‘oku ‘i ai ‘a e fakalakalaka kimu’a ’a e tu’unga ko eni´ ‘i he ta’u´, ‘aki ‘enau nō atu ki tu’a ‘a e hulu ‘i he’enau pa’anga ngāue. Na‘e hiki hake foki mo e ‘avalisi ‘o e totongi tupu ‘i he nō mo e fakahū pa’anga´ (weighted average interest rate spread) ‘i Tisema tupu meiˊ he hiki ‘i he ‘avalisi ‘o e totongi tupu ‘i he nō (weighted average lending rate).
Ko e pa’anga hū mai ne tānaki mei he ngaahi pangikē fakakomēsialeˊ, tupu pea mei he lahi ange ‘a e pa’anga ne talafi mai mei he ngaahi kainga ‘i muliˊ pehē ki he ngaahi pa’anga tokoni ki he pule’angaˊ, na’a ne hiki hake ‘a e tu’unga ‘o e pa’anga talifaki ‘i muli´ (foreign reserves) ki he tu’unga lekooti ma’olunga kuo a’u ki ai, ‘a ia ko e $478.5 miliona, ‘o fe‘unga ia mo e māhina ‘e 7.6 ‘o e koloa mo e ngaahi ngāue hū mai mei muliˊ.
Na‘e hokohoko atu ai pē ‘a e holo ‘a e totongi koloa fakalūkufua´ ‘i Tisema, ‘aki ‘a e peseti ‘e 0.9 makatu‘unga mei he ma’ulalo ange ‘a e totongi ‘o e koloa fakalotofonua΄ pea mo e koloa hū mai´. ‘Ikai ke ngata ai´, ka na’e toe holo foki mo e tu’unga hikihiki ‘o e totongi koloa fakata’u΄ ki he peseti ‘e 4.8, hili ia ‘a ‘ene a’u ki he tu’unga ma’olunga taha he ta’uˊ ‘i Nōvema ‘a ia ko e peseti ‘e 6.5, pea peseti ‘e 6.1 ‘i Tisema 2017. Ko e talu eni ‘a e nofo pē‘a e hikihiki ‘o e totongi koloa΄ ‘i ‘olunga he peseti ‘e 5, pea mei Siulai 2018.
‘Oku fakafuofua ‘e he Pangikē Pule´ ‘e kei tupu pē ‘a e tu’unga faka’ekonōmika ‘a e fonua´ ‘i he kaha’u´, kā ‘e malava uesia ‘a e fakafuofua ko ‘eni´ mei he ngaahi feliuliuaki ‘i he tu’unga ‘o e ‘ea´. Ko e pa‘anga talifaki ‘i mulí´ ‘oku fakafuofua ‘e kei ‘i he tu’unga fakafiemālie pē, pea ‘oku ‘amanaki ‘e hokohoko atu ai pē ‘a e holo ‘o e hikihiki ‘i he totongi koloaˊ. Ko e ngaahi pangikē ‘oku fakafuofua te nau kei ‘i he ‘a e tu’unga fakafiemālie pē.
Makatu’unga pea mei he ngaahi fakamatala kuo fakahā atu ‘i ‘olunga´, ‘oku kei taau ke hokohoko atu ai pē ‘a e ngaahi tu’utu’uni ngāue fakapa’anga lolotonga´. ‘Oku kei fakahoko pē ‘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 fakatu’apule’anga´, mo tu’u mateuteu ke liliu ‘a e ngaahi fokotu’utu’u ngāue fakapa’anga´ ‘o ka fiema’u.
