The National Reserve Bank of Tonga’s Board of Directors at its board meeting on the 23rd September 2019, approved to maintain its current monetary policy measures outlined below. This is to encourage utilization 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%, and
- maintain the inflation reference rate at 5%.
The Governor of the Reserve Bank, Sione Ngongo Kioa, reported that positive domestic activities were observed in July 2019. Agricultural exports improved in July particularly for root crops and fruits, coinciding with improved inflow of proceeds. Launching of the pathway to sustainable ocean project, together with receipt of cash and in-kind donations to the Government is expected to further support the growth of the agricultural and fisheries sectors. Additionally, government renewable energy projects contribute to the development of the utility sector. Construction activities continue to be positive underpinned by growing housing and manufacturing loans, and higher estimated values of approved building permits. The tourism sector benefitted from the July festivities such as the celebration of His Majesty’s 60th Birthday, Heilala Week Festival and Tonga High School 72nd Anniversary which attracted many international visitors to Tonga, thus both international arrivals and travel receipts grew in July. Vehicle registration also increased, although container registrations declined.
The banking system continues to be sound supported by strong capital positions and adequate profits. The banks’ total loans to deposit ratio rose over the month to 78.4% from 77.9% in the previous month reflecting more loans relative to the increase in deposits. Although this is near the 80% minimum loan to deposit ratio the liquidity in the banking system is still high indicating that there is still capacity available for further lending. The weighted average interest rate spread remained at 6.09% as lower lending rates were mostly offset by the decrease in deposit rates.
Official foreign reserves rose by $8.6 million in July 2019 to $492.9 million, equivalent to 8.2 months of imports cover and a new high record. Inflow of budget support and grants from development partners, and remittances contribute to the high level of foreign reserves.
In terms of inflation, Tonga recorded a 0.5% deflation in July, compared to 5.8% in July of last year. The annual deflation was driven mostly by declining domestic prices of 2.4% specifically for kava Tonga, local food and communication services. Imported prices however, continued to rise by 1.1% as prices for most groups rises except for petroleum, personal care services and medical products. New custom duties and excies taxes introduced by the Ministry of Revenues and Customs on imported eggs, vehicles and local tobacco is expected to contribute to higher inflation rates commencing in September 2019.
Tonga’s economic performance continues to remain positive in the medium term. However, weather uncertainty and global uncertainties pose a risk to the outlook. The level of foreign reserves is projected to remain at a comfortable level and inflation is expected to remain below the reference rate of 5%. The banking system is anticipated to continue to remain sound with sufficient provisions as a prudent approach to credit risk.
In consideration of 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 utilization of the excess liquidity in the banking system to increase lending, support domestic economic activities, and strengthen the monetary policy transmission mechanism. Meanwhile 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 Ngaue Fakapa'anga
Na‘e tali ‘e he Poate ‘a e kau Talēkita ‘o e Pangikē Pule Fakafonua ‘o Tonga´ hili ‘enau fakataha ‘i he ‘aho 23 ‘o Sepitema 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, ki 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 pē hono ta’etotongi ‘a e tupu (interest) ‘i he ngaahi ‘akauni pa‘anga ngāue ‘a e ngaahi pangikē´ (Exchange Settlement Account) ‘oku fakahū ‘i he Pangikē Pule´ (zero interest rate policy);
- Ke ‘oua ‘e toe ma‘ulalo hifo ‘i he peseti ‘e 80 ‘a e lahi e ngaahi nō ‘oku tuku atu ‘e he ngaahi pangikē ‘o fakahoa ki he lahi ‘o ‘enau ngaahi fakahū pa‘anga´ (loans/deposit ratio);
- Ke kei tu’uma’u pē ‘a e lahi ‘o e pa‘anga ‘a e ngaahi pangikē fakakomēsiale´, ‘a ia ‘oku tu‘utu‘uni fakalao ke tauhi ‘i he Pangikē Pule´ (Statutory Reserve Deposit) ‘i he peseti ‘e 10; pea
- Ke tauhi pē ‘a e tu‘unga ‘o e hikihiki ‘i he totongi ‘o e ngaahi koloa´ (inflation reference rate) ke ‘oua na’a laka hake he peseti ‘e 5.
Na‘e fakahā ‘e he Kōvana ‘o e Pangikē Pule´, Sione Ngongo Kioa, ’oku hā mai e ngaahi ola lelei mei he ngaahi ngāue faka‘ekonōmika fakalotofonua´ ‘i he māhina Siulai 2019. Na‘e kake hake ‘a e lahi e ngoue ‘oku uta atu ki muli ‘i Siulai´, ‘o tautefito ki he ngaahi ngoue foha´ mo e fua’i’akau´, ‘o fenāpasi mo e lahi ange ‘a e pa’anga ‘oku ma’u mai mei hono fakatau atu ‘o e ngoue´ ki tu’apule’anga´. ‘Oku poupou ‘a hono fokotu’u ‘o e ngaahi polōseki fo’ou hangē koe Halafononga ki ha Ngatai Tu’uloa´, mo e ngaahi tokoni fakame’angāue mo fakapa’anga kehekehe pē, ki hono pātoloaki ‘a e tupu ‘i he sekitoa ngoue´ mo e toutai´. ‘Oku kau atu mo e ngaahi polōseki ‘a e pule’anga´ fekau’aki mo e ma’u’anga ivi fakaenatula´ (renewable energy) ki he tupulekina ‘a e sekitoa ki he ngaahi fiema’u faka’api´. ‘Oku longomo’ui aipē ‘a e ngaahi ngāue langa´ ‘o makatu’unga he lahi ange ‘a e ngaahi nō fale´ mo e nō ki he ngaahi pisinisi fa’u koloa´, pehē ki he toe lahi ange ‘a e ngaahi kole ngofua langa kuo ‘osi tali´. Na’e kaunga lelei foki ‘a e ngaahi katoanga ‘i Siulai´ ki he sekitoa takimamata´, hangē ko hono katoanga’i e ‘Aho ‘Alo’i ‘o e Tama Tu’i´, Uike Heilala´, mo e Fakamanatu ‘o e ta’u 72 ‘o e ‘Apiako Mā’olunga ‘o Tonga, ‘a ia na’a ne tohoaki’i mai ‘a e kau folau tokolahi ‘i Siulai. Ne hā mahino eni ‘i he tupu ‘a e tokolahi ‘o e kau folau mei tu’apule’anga ne tū’uta mai ki Tonga´ ni ‘i he māhina Siulai´, pea mo e lahi ange ‘a e pa’anga hū mai mei he fefolau’aki´ (travel receipts). Na’e tupu foki mo e lahi ‘o e ngaahi me’alele kuo lesisita´, neongo na’e ‘i ai ‘a e holo ‘i he ngaahi koniteina na’e lesisita´.
‘Oku kei ‘i he tu‘unga fakafiemālie pē ‘a e fai fatongia ‘a e ngaahi pangikē fakakomēsiale´, ‘o poupou ki ai ‘a e mālohi fe‘unga e ivi ‘enau pa‘anga ngāue´, pehē ki he‘enau ngaahi tupu´ (profits). Na‘e tupu ‘a e peseti ‘o e ngaahi nō ne tuku atu´ ‘i hono fakahoa ki he lahi ‘o e ngaahi fakahū pa‘anga´ (loans/deposit ratio), ki he peseti ‘e 78.4 mei he peseti ‘e 77.9 ‘i he mahina kuo ‘osi΄, ‘o makatu’unga mei he lahi ange ‘a e tupu ‘o e ngaahi nō kuo tuku atu´, ‘i he tupu ‘o e fakahū pa’anga΄. Neongo kuo ofi eni ‘i he peseti ‘e 80 kuo tu‘utu‘uni ‘e he Pangikē Pule´, kā ‘oku mahino mai ‘oku kei lahi pē ‘a e hulu ‘i he pa’anga ngāue (liquidity) ‘a e ngaahi pangikē ‘a ia ‘oku malava ke kei nō atu ki tu’a´. Na‘e tu’umau pē ‘i he peseti ‘e 6.09 ‘a e ‘avalisi ‘o e totongi tupu ‘i he nō mo e fakahū pa’anga´ (weighted average interest rate spread), tupu pea mei he fetāmate’aki pē ‘a e holo ‘a e totongi tupu ‘i he fakahū pa‘anga´ (deposit rates) mo e holo ‘i he totongi tupu ‘i he nō, (lending rates).
Na‘e hiki hake ‘a e tu‘unga ‘o e pa‘anga talifaki ‘i muli´ (foreign reserves) ‘aki ‘a e $8.6 miliona ki he $492.9 miliona ‘i Siulai 2019, ‘o fe‘unga ia mo e māhina ‘e 8.2 ‘o e koloa mo e ngaahi ngāue hū mai mei muliˊ. Na‘e makatu‘unga ‘a e hiki ko eni΄ mei he ma‘u mai ‘o e ngaahi pa‘anga tokoni ki he patiseti mo e ngaahi polōseki ‘a e pule’anga΄ mei he ngaahi hoa ngaue fakalakalaka΄, fakataha mo e talafi pa’anga fakataautaha mei muli΄.
Na‘e holo ‘a e tu’unga ‘o e totongi koloa fakalukufua΄ ‘i Siulai΄ ‘aki ‘a e peseti ‘e 0.5, ‘o fakahoa ki he hiki peseti ‘e 5.8 ‘i he māhina tatau ‘o e ta’u kuo’osi΄. Ko e holo fakata’u ko eni΄ na’e tupu ia pea mei he holo ‘a e ngaahi totongi koloa fakalotofonua΄ ‘aki ‘a e peseti ‘e 2.4, tautefito ki he totongi ‘o e kava Tonga΄, me’akai fakalotofonua΄ mo e ngaahi sēvesi ki he fakafetu’utaki΄. Kaekehe, na’e kei hikihiki pē ‘a e totongi koloa hū mai mei muli΄ ‘aki ‘a e peseti ‘e 1.1 ki he kotoa ‘o e ngaahi koloa hū mai΄ tukukehe ‘a e totongi lolo΄, ngaahi sēvesi fakataautaha΄ mo e ngaahi koloa fakafaito’o΄. ‘Oku ‘i ai foki mo e ngaahi totongi tute mo e tute ‘ekisia fo’ou kuo tānaki mai ‘e he Potungaue Tānaki Tukuhau mo e Kasitomu΄ ki hono hū mai ‘o e fua’imoa΄ mo e ngaahi me’alele mei muli΄, pea mo hono fakatau ‘o e tapaka Tonga΄, ‘a ia ‘oku ‘amanaki te ne to e hiki hake ‘a e tu’unga ‘o e totongi koloa fakalukufua΄ ‘o kamata ‘i he mahina΄ ni, Sepitema 2019.
‘Oku fakafuofua ‘e he Pangikē Pule´ ‘oku fakalakalaka pē kimu’a ‘a e tu’unga faka’ekonōmika ‘a e fonua´ ‘i he kaha’u vave mai´. Kā ‘e malava uesia ‘a e fakafuofua ko ‘eni´ mei he ngaahi feliuliuaki ‘i he tu’unga ‘o e ‘ea´ pea mo e ta’epau ‘a e tu’unga faka’ekonōmika fakamamani lahi΄. Ko e pa‘anga talifaki ‘i mulí´ ‘oku fakafuofua ‘e kei ‘i he tu’unga fakafiemālie pē, pea ‘oku ‘amanaki ‘e nofo pē ‘a e hikihiki ‘i he totongi koloaˊ ‘o ‘ikai ma’olunga ange he peseti ‘e 5. Ko e ngaahi pangikē ‘oku fakafuofua ‘e ‘i he tu‘unga fakafiemālie pē mo ‘enau ngaahi ngāue΄ pea fe’unga pē ‘a ‘enau pa’anga talifaki ki ha fa’ahinga uesia ‘i he tupu ‘o e ngaahi nō kuo tuku atu΄.
Makatu‘unga pea mei´ he ngaahi fakamatala kuo fakahā atu ‘i ‘olunga´, ‘oku kei taau ke hokohoko atu 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 te ne faka‘ai‘ai ‘a hono ngāue’aki ‘a e hulu ‘i he pa’anga ngāue ‘a e ngaahi pangikē, ki hono nō atu ke tokoni ki he ngaahi ngāue faka’ekonōmika fakalotofonua´, pea ke poupou mo pātoloaki ha tupu faka‘ekonōmika ‘oku ma‘uma‘uluta mo tolonga. ‘Ikai ngata ai´, ka ‘oku tokanga aipē ‘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.
