The National Reserve Bank of Tonga’s Board of Directors at its first board meeting for the year, on the 27th of January 2021, 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 to growth sectors and to support the economy from the impacts of COVID-19.
- 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%.
- Maintain the inflation reference rate at 5%.
- Monitor the commercial banks' liquidity and adjust the SRD ratio if needed.
- Monitoring the commercial banks’ capital reserves and adjust further when required.
- Ease the exchange control requirements when required.
- Continue to issue Government Bonds.
- Maintain clear channels of effective communications with the financial institutions for adequate preparedness.
- Continue to be transparent and raise awareness of its monetary policy decisions through press releases to the public.
- Closely monitor the impacts of the pandemic in the financial system for early detection of any signs of vulnerability.
- Continue to ensure both commercial banks and non-bank financial institutions adheres to all Government declarations regarding COVID-19 in the workplace while delivering essential financial services to the public.
The Governor of the Reserve Bank, Sione Ngongo Kioa, shared that the domestic economy for November 2020 experienced slight growth despite continued conditions of closed borders and COVID-19 restrictions. The primary sector reported a decline in total agricultural exports, mainly, taro, yam, and watermelons. However, squash exports rose during the month yet was much lower than November 2019. The secondary sector indicated growth yet gain due to the completion of new classrooms from the TC Gita and TC Harold reconstruction projects. Lending to businesses within the sector rose further adding to growth. The tertiary sector showed some activity as repatriation flights continued. Container registrations increased depicting some growth in the trade sector.
Inflation slightly increased in November 2020 by 0.3% driven solely by domestic prices particularly for electricity, fuel, and food. However, in the year to November 2020, deflation continued and declined by 0.8%. The annual headline deflation was due solely to domestic prices partially offsetting higher imported prices. Lower domestic prices resulted in a decline in prices for electricity, gas, other fuels, and kava Tonga.
Official foreign reserves increased during the month and rose significantly during the year to November 2020 by $8.7 million and $100.7 million respectively to $590.2 million, equivalent to 9.9 months of imports. The monthly increase is attributed to an increase in budget support receipts, project grant funds and remittance receipts.
The total banking system continues to maintain its soundness supported by strong capital and adequate profits. The banks’ total loans to deposit ratio declined to 70.4% in November 2020 from 73.8% last month and remains below the 80% minimum. The consistent fall of this ratio continues despite excess liquidity existing in the system coupled with higher money supply. Although banks’ total lending increased in November 2020, the level of deposits also continued to climb higher. The weighted average interest rate spread increased over the month by 4.2 basis points whilst it declined by 40.4 basis points in the year to November 2020 to 5.660% resulting from a decline in lending rates.
In consideration of the above, the Reserve Bank continues to review its GDP forecasts and projects a moderate downturn in future economic growth. Foreign reserves is still expected to be well above the 3 months minimum threshold of import cover, while inflation is also expected to remain below the 5% reference rate. The banking system is still sound supported by high liquidity. Meanwhile, the Reserve Bank continues to be vigilant in closely monitoring its economic and financial indicators and stands ready to adjust its monetary policy settings if needed to maintain internal and external stability and support macroeconomic growth.
Tu‘utu‘uni ki he Fokotu‘utu‘u Ngāue Fakapa‘anga
Na‘e tali ‘e he Poate ‘a e kau Talēkita ‘o e Pangikē Pule Fakafonua ‘o Tonga´ í he ‘enau fuofua fakataha ki he taú´ ‘i he ‘aho 27 ‘o Sanuali 2021, ke kei hoko atu 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 pangikee´, ke nō atu ki he ngaahi sekitoa fakatupu´ pea mo tokoni’i e ‘ekonōmika ‘a e fonua´ mei he ngaahi uesia ‘o e COVID-19.
- Ke hoko atu pē hono ta’etotongi ‘a e tupu (interest) ‘i he ngaahi ‘akauni pa‘anga ngāue ‘a e ngaahi pangikee´ (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 pangikee´ ‘o fakahoa ki he lahi ‘o ‘enau ngaahi fakahū pa‘anga´ (loans/deposit ratio).
- Ke 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.
- 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 í he peseti ‘e 5.
- Muimui’i ofi ‘a e lahi ‘o e pa’anga ngāue ‘a e ngaahi pangikee´, pea holoki e peseti ‘oku tu’utu’uni fakalao ke tauhi ‘i he Pangikē Pule´ (SRD) ‘oka fiema’u.
- Vakai’i ‘a e tu’unga ‘oku ‘i ai ‘a e pa’anga tefito ‘a e ngaahi pangikee´ ke fe’unga, pea liliu ‘a e tu’utu’uni lolotonga´ ‘i ha taimi ‘e fiema’u ai.
- Fakafaingofua’i ‘a e ngaahi tu’utu’uni fekau’aki mo e fetongi pa’anga muli´ ’i ha taimi ‘e fiema’u ai.
- Hokohoko atu pē ‘a e founga lolotonga ki hono fakatau ‘a e ngaahi pōnite ‘a e Pule’anga´.
- Tauhi ‘a e fetu’utaki vāofi mo e ngaahi kautaha fakapa’anga´ ke fakapapau’i ‘oku nau ‘i ha tu’unga mateuteu fe’unga.
- Hoko atu pē hono faka’ata kitu’a ‘a e ngaahi tu’utu’uni ngāue ‘a e Pangikē Pule´ ‘aki hono fakahā atu ‘i he ngaahi fanongonongo tuku atu ki he kakai ‘o e fonua´.
- Muimui’i ofi ‘a e ngaahi uesia ‘o e mafola fakamāmani lahi ‘a e COVID-19 ‘i he ngaahi ngāue fakapa’anga´ telia ha ngaahi faka’ilonga ‘o ha tu’ulaveangofua.
- Fakapapau’i ‘oku hokohoko atu pē ‘a e talangofua ‘a e ngaahi pangikee´ mo e ngaahi kautaha fakapa’anga ‘oku ‘ikai ko ha pangikē ki he ngaahi tu’utu’uni Fakapule’anga fekau’aki mo e COVID-19, pea ‘i he taimi tatau ‘oku kei fakahoko pe ‘a e ngaahi ngāue fakapa’anga´ ki he kakai ‘o e fonua´.
Í he lipooti ‘a e Kōvana ‘o e Pangikē Pule´, Sione Ngongo Kioa, óku í ai pē á e kake í he ola ó e ngaahi ngāue faka’ekonōmika fakalotofonua´ í he māhina Nōvema 2020, neongo á e kei tāpuni á e kauáfonua´. Í he vakai ki he sekitoa ngoue´, vaotātāa mo e toutai´, naé kií holo á e lahi ó e ngoue naé fakatau atu ki tuápuleánga´ ó tautefito ki he talo´, úfi´ mo e meleni´. Kaekehe, naé lahi ange á e hina naé uta atu´, kā óku kei siísií pē eni í he lahi ó e hina naé uta atu í Nōvema 2019. Óku kei kake pe á e ngaahi ngāue í he sekitoa fakatupu koloa´ áki hono fakakakato á e langa ó ha ngaahi loki ako mei he polōseki langa fakaakeake mei he saikolone Gita mo Haloti´. Naé tupu foki mo e ngaahi nō ne tuku atu ki he sekitoa ko eni´. Naé hā mai pē mo ha ngaahi ola mei he sekitoa ngāue´, tupu mei he ngaahi ngāue felāveí mo hono fakafoki mai hotau kainga mei muli´. Naé hiki hake mo e ngaahi koniteina na’e lēsisita´ ó fakaílonga mai ha kake í he sekitoa fefakatauáki´.
Na’e tupu sií ‘a e tuúnga hikihiki ó e totongi koloa΄ í he māhina Nōvema 2020 áki ‘a e peseti ‘e 0.3, makatuúnga pea mei he hiki hake á e ngaahi totongi koloa fakalotofonua΄ ó tautefito ki he totongi úhila΄, lolo΄ mo e meákai΄. Ka neongo ia, naé kei holo pē ‘a e tuúnga hikihiki ó e totongi koloa fakalūkufua΄ í he taú΄ ki Nōvema 2020 áki á e peseti é 0.8. Ko e holo á e tuúnga hikihiki ó e totongi koloa´ ‘i he taú´, naé tupu ia mei he holo á e ngaahi totongi koloa fakalotofonua΄ ó lahi ange í he hiki á e ngaahi totongi koloa hū mai΄. Ko e holo á e ngaahi totongi fakalotofonua΄ ‘i he taú´, naé tupu ia mei he holo á e totongi úhila΄, totongi kasa΄ mo e ngaahi koloa lolo kehe΄, mo e totongi ó e Kava Tonga΄.
Naé tupu mālohi á e tu‘unga ‘o e pa‘anga talifaki ‘i muli´ (foreign reserves) í he māhina moe taú´ ki Nōvema 2020 áki á e $8.7 miliona moe $100.7 miliona, ki he $590.2 miliona, ó feúnga ia mo e māhina ‘e 9.9 ‘o e ngaahi koloa mo e ngāue hū mai mei muli´. Na’e makatu’unga ‘a e tupu lahi ko eni´ mei he lahi ange á e ngaahi tokoni fakapaánga ki he patiseti á e Puleánga´, paánga ki he ngaahi polōseki langa fakalakalaka´, pehē foki ki he talafi paánga taautaha mai mei muli´.
Óku kei malu pē ‘a e fai fatongia ‘a e ngaahi pangikee´, ‘o poupou ki ai ‘a e mālohi ‘o ‘enau pa‘anga tefito´, pehē ki he‘enau ngaahi tupu´ (profits). Na‘e toe holo pē ‘a e lahi ‘o e ngaahi fakahū pa‘anga´ ne tuku atu´ ‘i hono fakahoa ki he lahi ‘o e ngaahi nō (loans/deposit ratio) í Nōvema 2020, ki he peseti ‘e 70.4 mei he peseti ‘e 73.8 í he māhina kuoósi´ ó kei ma‘ulalo pē ‘i he tuúnga maúlalo taha óku tuútuúnií´ á ia ko e peseti ‘e 80. Óku holo māmālie pē á e tuúnga ko eni neongo óku lahi ange á e paánga ngāue á e ngaahi pangikee´, pehe ki he lahi ó e paánga fakalūkufua á e fonua´. Kaekehe, naé kake hake á e ngaahi nō ne tuku atu í Nōvema 2020 kā í he taimi tatau naé tupu pē mo e e ngaahi fakahū paánga´. Ko e ‘avalisi ‘o e totongi tupu ‘i he nō mo e fakahū pa’anga´ (weighted average interest rate spread) naé lahi ange ‘i he māhina´ ‘aki ‘a e poini peseti ‘e 4.2, kae holo ‘i he ta’u´ ki Nōvema 2020 ‘aki ‘a e poini peseti ‘e 40.4 ki he peseti ‘e 5.66 makatu’unga mei he holo ‘a e totongi tupu ‘i he ngaahi nō (lending rates).
Makatu‘unga pea mei´ he ngaahi fakamatala kuo fakahā atu ‘i ‘olunga´, óku kei fakafuofua pe é he Pangikē Pule é holo á e tuúnga faka’ekonōmika ‘a e fonuaˊ í he kahaú vave maiˊ. Óku kei ámanaki pē é fakafiemālie pē ‘a e tuúnga ó e pa‘anga talifaki ‘i mulí´ ‘o lahi ange ‘i he māhina ‘e 3 ‘o e koloa hū maiˊ, pea kei ma’ulalo pē ‘á e tu’unga ‘o e totongi koloa fakalūkufua´ i he peseti ‘e 5. Ko e ngaahi pangikē ‘oku kei malu pē mo ‘enau ngaahi ngāue΄, pea kei hulu pē mo ‘enau pa’anga ngāue΄. ‘Oku mātu’aki tokanga ‘a e Pangikē Pule´ ki hono muimui‘i ofi ‘a e ola ‘o e ngaahi ngāue faka‘ekonōmika΄ mo fakapa’anga΄, pea mateuteu ke liliu ‘a e ngaahi fokotu‘utu‘u ngāue fakapa‘anga lolotonga´ ‘o ka fiema‘u ke pukepuke ‘aki ‘a e ma’uma’uluta fakalotofonua΄ mo fakatu’apule’anga΄, pea ke tokoni foki ki he tupu faka‘ekonōmika fakalūkufua΄.
