The National Reserve Bank of Tonga’s Board of Directors at its meeting on the 30th of April 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, reported yet again a domestic slowdown in February 2021. Most indicators indicated lower economic activity despite a few positive movements. The primary sector reported that total agricultural exports rose during the month owing to more exports of yams and cassava which coincided with higher agricultural export proceeds. Lending to the construction sector increased, yet, lending to utility and manufacturing sector over the month both fell. The total container registrations declined again in February 2021 as a result of both lower business and private container registrations indicating a slowdown in trading activities.
Inflation increased by 1.1% in February 2021 due to higher imported and domestic prices. In particular, electricity, fuel, and food. Headline annual inflation rose by 2.1%, driven by both higher imported and domestic prices. This owes to an increase in prices for food, tobacco and alcoholic beverages (imported prices) whilst higher prices for food, tobacco, and clothing & footwear drove domestic prices higher.
Official foreign reserves fell at the end of February 2021 by $12.9 million, equivalent to 11.7 month of imports. The monthly movement was driven mostly by an increase in business and government payments for goods and services. However, foreign reserves rose significantly in the year to February 2021 by $212.5 million. This attributed mostly to receipts of budget support, official grants, and remittances.
The total banking system continues to maintain its soundness supported by strong capital and excess liquidity. The decline in total deposits outweighed the decline in total lending which resulted in a higher loans to deposit ratio in February 2021 to 68.2% from 67.8% last month. This ratio continues to remain below the 80% minimum threshold despite the excess liquidity in the banking system. The weighted average interest rate spread narrowed by 1.6 basis points in the month of February 2021 and declined annually by 28.2 basis points to 5.693%.
The Reserve Bank’s latest GDP forecast depicts a worse-than-expected outcome for 2019/20 and 2020/21 fiscal years. However, even with the revised forecasts, the level of foreign reserves is still expected to be above the 3 months minimum threshold of import cover, while inflation is to remain below the 5% reference rate. The banking system is still sound supported by high liquidity and capital positions. 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 fakataha ‘i he ‘aho 30 ‘o ‘Epeleli 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.ng.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 á e Kōvana ‘o e Pangikē Pule´, Sione Ngongo Kioa, óku kei hokohokoho atu pē á e māmālie á e ngaahi ngāue faka’ekonōmika fakalotofonua´ ‘i Fepueli 2021. Na’e lahi ange ‘a e ngaahi fakaílonga na’e holo´ á e ngaahi ngaue faka’ekonōmika fakalotofonua neongo ne ‘i ai pe ngaahi fakaílonga na’e kake he māhina´. ‘I he vakai ki he sekitoa ngoue´, vaotātaa´ mo e toutai´, naé kake hake á e ngoue naé uta ki tuápuleánga´ tautefito ki he ngoue foha´, ó hangē koe manioke´mo e úfi´, ó fenāpasi mo e lahi ange á e paánga hū mai mei hono fakatau atu ó e ngoue´ ki tuápuleánga´. Naé tupu foki mo e ngaahi nō ne tuku atu ki he sekitoa langa´, kae holo á e ngaahi nō ne tuku atu ki he sekitoa úhila´ moe fakatupu koloa´ í he lolotonga ó e māhina´. Naé siísií ange á e lesisita ó e ngaahi koniteina mei muli´ tupu mei he holo fakatouósi á e ngaahi koniteina á e ngaahi pisinisi´ pehē foki ki he taautaha´, ó hā mai mei heni á e māmālie ange ‘a e fefakatauáki´.
Na’e tupu peseti ‘e 1.1 ‘a e hikihiki fakata’u ‘o e totongi koloa΄ ‘i Fepueli 2021, makatuúnga mei he kake fakatouósi á e ngaahi totongi koloa hū mai mei muli΄ mo e ngaahi totongi koloa fakalotofonua΄. Naé tupu eni mei he hiki á e ngaahi totongi úhila΄, lolo΄, mo e meákai΄. Na’e tupu peseti ‘e 2.1 ‘a e hikihiki fakata’u ‘o e totongi koloa΄ ‘i he ta’u΄ ki Fepueli 2021 makatu’unga mei he hiki á e ngaahi totongi koloa hū mai mei muli΄ mo fakalotofonua΄. Ko e ngaahi koloa hū mai ne hiki hake hono totongi΄ óku kau ai e koloa me’akai΄, tapaka΄, pea mo e kava malohi΄, kā koe ngaahi koloa fakalotofonua΄ óku kau ai e koloa me’akai΄, tapaka΄, vala΄ mo e ngaahi suu΄.
Ko e tu‘unga ‘o e pa‘anga talifaki ‘i muli´ (foreign reserves) naé holo í Fepueli 2021 áki á e $12.9 miliona, ‘o fe’unga ia mo e māhina ‘e 11.7 ó e ngaahi koloa mo e ngāue hū mai´. Na’e makatu’unga ‘a e holo ko eni´ mei he lahi ange ‘a e ngaahi totongi koloa mo e sēvesi ki muli á e Puleánga´. Kaekehe, í he taú ki Fepueli 2021, óku kei kake lahi pē á e tu‘unga ‘o e pa‘anga talifaki ‘i muli´ áki á e $212.5 miliona. Óku makatuúnga eni mei he lahi ange ‘a e ngaahi tokoni fakapa’anga ki he patiseti ‘a e Pule’anga´, moe talafi pa’anga taautaha mai mei muli´.
‘Oku kei malu pē ‘a e fai fatongia ‘a e ngaahi pangikee´, ‘o poupou ki ai ‘a e mālohi ‘o ‘enau pa‘anga tefito´ (capital), pehē ki he hulu ‘enau pa’anga ngāue´ (liquidity). Na’e holo ‘a e ngaahi fakahū pa‘anga΄ he māhina´ ó lahi ange í he holo á e ngaahi nō ne tuku atu΄. Í heéne pehē, naé kake hake ‘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) ki he peseti é 68.2 mei he peseti é 67.8 í he māhina kuo ósi´. ‘Oku kei ma‘ulalo pē eni ‘i he tu’unga ma’ulalo taha ‘oku tu’utu’uni’i´ ‘a ia ko e peseti ‘e 80, neongo ‘a e kei hulu ‘a e paánga ngāue´. Óku hokohoko atu pē á e holo á e tuúnga ko eni´ neongo óku kei lahi pē á e pa’anga ngāue á e ngaahi pangikee´. Ko e ‘avalisi ‘o e totongi tupu ‘i he nō mo e fakahū pa’anga´ (weighted average interest rate spread) na’e holo hifo í he māhina´ áki á e poini peseti é 1.6, pea ‘i he ta’u´ ki Fepueli 2021 áki á e poini peseti e 28.2 ki he peseti ‘e 5.693.
‘I he vakai fakamuimui ‘a e Pangikē Pule΄ ki he tupu faka’ekonōmika fakalotofonua΄, ‘oku kei tu’uma’u pē ‘a e fakafuofua ‘e holo ‘a e tupu faka’ekonōmika΄ ‘i he 2019/20 pea mo e 2020/21, kā ‘e toe holo lahi ange ‘a e 2020/21 mei he fakafuofua kimuá΄. Ka neongo e ngaahi fakafuofua ko eni, koe tu’unga ó e pa‘anga talifaki ‘i mulí´ óku ámanaki ‘e kei fakafiemālie pē ‘o lahi ange ‘i he māhina ‘e 3 ‘o e koloa mo e ngāue hū maiˊ, pea kei ma’ulalo pē ‘a e hikihiki ‘o e totongi koloa fakalūkufua´ i he peseti ‘e 5. Ko e ngaahi pangikē ‘oku kei malu pē mo ‘enau ngaahi ngāue΄, ó tokoni ki ai á e hulu ‘o ‘enau pa’anga ngāue΄ mo e lahi énau sinoí paánga tefito´. ‘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΄.
