The National Reserve Bank of Tonga’s board of directors at its meeting on the 20th December 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 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, announced that the activities in the domestic economy were positive over the month of October. Total agricultural export volumes rose significantly driven by the squash harvesting season and other variety of root crops. Loans in the secondary sector increased indicating continued vibrant activities within the industry. Banks’ lending to individual housing rose followed by lending to businesses for construction and manufacturing purposes. Partial indicators suggest household disposable income levels increased supported by the increase in remittance receipts and new commitments for personal loans. Reflecting the demand for imported goods, container registrations rose mainly for business containers coinciding with an increase in import payments for wholesale & retail goods as businesses stock up in preparation for the festive season and points to stronger activity in the trade sector throughout the month. The financial services continued to grow supported by strong credit growth. Travel receipts also increased, even though international air arrivals fell over the month coinciding with the decline in the number of flight arrivals.
The banking system continued to remain sound over October 2018 as banks maintained a strong capital position, supported by adequate profits and low level of non-performing loans. Higher deposits by the commercial banks to the Reserve Bank’s vault contributed to expanding reserve money. The banks’ total loans to deposit ratio grew to 73.3% from 72.9% in the previous month, reflecting higher lending outweighing growth in deposits. This ratio continued 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 widened over the month due to the increase in the weighted average lending rate.
The foreign reserves rose over the month to $457.3 million as a result of increases in official transfer receipts and lower government payments. This is sufficient to cover for 7.3 months of imports.
The Statistics Department has changed the Consumer Price Index, base period and also extended the coverage of the price changes to include Vava’u. The inflation rate rose over the month of October due to increases in domestic food and catering service prices coupled with increases in imported footwear, roof iron & timber and fuel prices. The headline inflation also rose over the year by 6.2% compared to 5.5% in September 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 fakataha ‘i he ‘aho 20 ‘o Tisema 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 tupu ‘a e ngaahi ngāue faka’ekonōmika´ ‘i he lolotonga ‘o e māhina ‘Okatopa. Na‘e hiki ma‘olunga ‘a e lahi ‘o e ngoue ne atu ki muli´, makatu’unga mei he fa‘ahi ta’u hina´ pea mo e toe lelei ange ‘a hono hū atu ‘o e me’akai foha´. ‘Oku hokohoko atu pē ‘a e lahi ange ‘o e ngaahi nō ‘oku tuku atu ki he sekitoa fakatupu koloa´ (secondary sector) ke tokoni ki he lelei ange ‘a e ngaahi ngāue ‘oku fakahoko ‘i he sekitoa ni. Na’e tokoni’i eni mei he toe lahi ange ‘a e ngaahi nō fale taautaha´ pea mo e nō fakapisinisi ‘o fakataumu‘a ki he langa fale pea moe fo‘u koloa (manufacturing). Na‘e hā mei he ngaahi ngaue faka‘ekonōmika ‘a e lahi ange ‘a e ivi fakapa‘anga ‘a e kakai ‘o makatu‘unga mei he hiki hake ‘a e lahi ‘o e talafi pa’anga mei muli´ pea mo e tupu ‘i he nō ki he ngaahi fiema’u fakataautaha´. Na‘e ho‘ata mei ai ‘a e fiema‘u ki he ngaahi koloa hū mai mei muli΄, na‘e hiki hake ‘a e lahi ‘o e ngaahi koniteina taumu‘a fakapisini ‘o fenāpasi mo e lahi ange ‘o e totongi koloa ki muli (wholesale & retail payments). ‘Oku kau ai pe ia ki he teuteu atu ‘a e ngaahi pisinisi΄ ki he ngaahi mahina katoanga ka hoko mai΄, ‘a ia ‘oku fakahaa‘i mai ‘e malohi ange ‘a e ngaahi ngaue fefakatau‘aki ‘i he ngaahi mahina ko ia΄. Na‘e hokohoko ai pe mo e tupu ‘a e ngaahi ngaue fakapa‘anga΄ ‘o fakatefito mei he tupu malohi ‘o e ngaahi nō. Na‘e toe kake mo e pa‘anga hū mai mei he folau‘eve‘eva΄ neongo na‘e holo e tokolahi ‘a e kakai ne tu‘uta vakapuna mai ki Tongaˊni mei tu‘apule‘anga´ koe‘uhi΄ pe ko e holo ‘a e lahi ‘o e vakapuna ne tu‘uta mai ki Tonga΄ni.
‘Oku kei ‘i he tu‘unga lelei pē ‘a e fai fatongia ‘a e ngaahi pangikē fakakomēsiale´ ‘i he mahina ko ‘Okatopa 2018, ‘o makatu‘unga meiˊhe lahi ange ‘a ‘enau pa’anga ngāue´, tu‘unga fakafiemālie ‘a ‘enau tupu´ (profitability), pea pehē ki he kei ‘i he tu‘unga ma‘ulalo ‘a e ngaahi nō ‘oku palopalema´. Na‘e tokoni e hiki hake lahi ‘o e fakahū pa’anga ‘a e ngaahi pangikē fakakomesiale ki he Pangikē Pule´ ke hiki hake ‘a e pa‘anga ngāue (reserve money) ‘a e ngaahi pangikē. Na’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 72.9 ‘i he mahina kuo’osi´ ki he peseti ‘e 73.3 ‘i he mahina´ni. ‘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) ‘o makatu‘unga meiˊhe kake ‘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 $457.3 miliona ‘o makatu‘unga meiˊ he lahi ange ‘o e pa‘anga tokoni ki he pule‘anga kae holo ‘enau totongi pa‘anga ki muli΄. ‘Oku fe‘unga ‘a e tu‘unga lolotonga ‘o e pa‘anga talifaki´ pea mo e māhina ‘e 7.3 ‘o e koloa mo e ngaahi ngāue hū mai mei muliˊ.
Na‘e liliu ‘e he Potungāue Sitetisitika΄ ‘a e me‘afua ki he hikihiki ‘i he totongi koloa΄, mahina tefito ki he fakafehoanaki (base period), pea fakakau mo Vava‘u ki he me‘afua ko ia΄. Na‘e hiki hake ‘a e totongi koloa fakalukufua ‘i ‘Okatopa makatu‘unga mei he hiki ‘a e totongi ‘o e me‘akai fakalotofonua mo e sevesi ‘o e ngaue faka-keita΄ (catering services) pea mo e ngaahi totongi koloa hū mai mei muli ‘o hange ko e sū silipa, kapa ‘ato fale, papa langa fale pea moe totongi lolo΄. Na‘e hiki hake ‘a e totongi fakalūkufua ‘o e ngaahi koloa fakata’u´ ki he peseti ‘e 6.2 ‘o fakahoa ki he peseti ‘e 5.5 ‘i Sepitema 2018. Na‘e hā 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 ngaue 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 ki he sitou (gas) pea mo e koloa su mo e vala´.
‘Oku kei fakafuofua ‘e he Pangikē Pule´ ‘e tupu ‘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.
