The National Reserve Bank of Tonga’s Board of Directors, at its board meeting on the 30th of November 2021, approved to maintain its current monetary policy measures outlined below. This is to encourage utilization of the excess liquidity in the banking system for further lending to growth sectors and supporting the economic recovery 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 assist the Government during COVID-19 with issuing 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 experienced mostly negative growth during September 2021. The primary sector reported that the agricultural export volumes fell by 240.7 tonnes (32.0%) due to lower exports of root crops and coincided with the monthly decline in agricultural export proceeds of $0.2 million (19.9%). The secondary sector showed mixed outcomes during the month as reflected in loans extended to each industry, whilst further progress were made in Government projects such as the wharves in smaller outer islands. The slowdown in the services sector continued with a significant decline in container registrations by 635 containers (68.4%). This was due to lower business and private containers, reflecting supply disruptions affecting trading activities.
Inflation increased by 0.1% during the month, mainly owing to higher imported prices (0.4%), and in the year to August 2021 by 6.5% driven by both higher imported and domestic prices. The annual headline inflation remains above the 5% reference rate. Higher for food and electricity prices primarily contributed to the higher local prices. Meanwhile, the rise in imported prices was driven by higher prices for fuel, gas and other fuels, and food items.
The level of official foreign reserves rose over the month and in the year to September 2021 by $5.3 million and $180.5 million respectively. The monthly rise was mostly due to government project funds and remittances. In year ended terms, foreign reserves increased due to more receipts of budget support, external financing, project funds, and remittances.
The total banking system continues to remain sound, supported by strong capital position and excess liquidity. Total deposits increased by $6.3 million (0.8%) as saving and demand deposits increased during the month. Meanwhile total lending declined by $2.7 million (0.6%) mostly reflecting public enterprises loan repayments. The increase in total deposits coupled with the decline in total lending resulted in the loan to deposit ratio slipping further to 58.2% in September 2021 from 59.0% last month. This remains below the 80% minimum.
The Reserve Bank’s GDP outlook projects a moderate recovery for the 2021/22 fiscal year. However, risks to the outlook are tilted to the downside as uncertainties remain on the evolution of the global pandemic. Although there is expected inflationary pressure in the near term, it is projected to be transitory and inflation will eventually fall below the 5% reference rate by the first quarter of 2022.
However, foreign reserves is still expected to remain at sufficient levels above the 3 months minimum threshold of import cover. The financial system is expected to remain sound supported by high liquidity, adequate capital positions, and subdued credit growth. The Reserve Bank continues to be vigilant by 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 Novema 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 fakaakeake ‘a 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 ‘i he peseti ‘e 10 ‘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).
- 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 liliu 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 tokoni ki he Pule‘anga′ lolotonga ‘a e taimi COVID-19 ‘aki ‘a hono tuku atu ‘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 pangikē´ 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´.
Na’e lipooti ‘e he Kōvana ‘o e Pangikē Pule´, Sione Ngongo Kioa, na’e vaivai ange e ngaahi ngāue faka’ekonōmika fakalotofonua´ ‘i Sepitema 2021. ‘I he vakai ki he sekitoa ngoue´, vaotātaa´ mo e toutai´, na‘e holo ‘a e lahi e ngoue na’e uta ki tu‘apule‘anga´ áki á e toni é 240.7 (peseti ‘e 32.0), makatu’unga ‘i he si’isi’i ange ‘a e meákai foha′. Na‘e holo mo e pa’anga hū mai mei he ngoue na‘e uta ki tu‘apule‘anga´ ‘aki ‘e $0.2 miliona (peseti ‘e 19.9). Na’e fetō’aki á e ola e ngaahi ngāue í he tafa’aki ‘o e fakatupu koloa´ ‘o hā mai í he holo á e ngaahi nō ne tuku atu ki he ngaahi sekitoa′ takitaha, neongo na’e kei hokohoko atu pē ‘a e ngaue ki he ngaahi polōseki ‘a e Pule’anga´ ‘o kau ai e polōseki langa uafu ‘a e ne fakahoko ‘i he ngaahi ‘otu motu iiki´. Na’e hōloa ai pē ‘a e sekitoa ngāue´, ‘o hā mai ‘i he holo lahi ‘a e lēsisita ‘o e ngaahi koniteina mei muli´ ‘aki ‘a e koniteina é 635 (peseti ‘e 68.4), makatu’unga mei he holo fakatouósi á e ngaahi koniteina pisinisi´ mo e taautaha´. ‘Oku hā mahino mei heni ‘a e ngaahi uesia tupu mei he lahi ‘o e toloi ‘a e fefolauáki ‘a e ngaahi vaka uta koloa´ ‘o ne uesia foki ai mo e fefakatau’aki´.
Na’e hiki e totongi koloa΄ ‘i he māhina Sepitema 2021 ‘aki á e peseti é 0.1 ‘o makatu’unga mei he hiki á e totongi koloa hū mai mei muli΄ (peseti ‘e 0.4). Na’e toe hiki pe ‘i he ta’u΄ ‘aki ‘a e peseti ‘e 6.5, ‘o makatu‘unga mei he hiki fakatou’osi ‘a e totongi koloa hū mai mei muli´ mo e fakalotofonua´. ‘Oku kei ma‘olunga pē ‘a e hikihiki ‘o e totongi koloa fakalūkufua΄ ‘i he peseti ‘e 5. Ko e hikihiki ‘a e totongi koloa fakalotofonua′ ne kau ki ai ‘a e totongi ó e ngaahi koloa me‘akai′, mo e totongi ‘uhila′. Ko e ma‘olunga ange ‘a e totongi koloa hū mai mei muli′ ne fakatefito ia ‘i he hiki hake ‘a e totongi lolo΄, mo e totongi ‘o e ngaahi koloa me‘akai΄.
Na’e hiki ‘a e pa‘anga talifaki ‘i muli´ (foreign reserves) ‘i Sepitema 2021 ‘aki ‘a e $5.3 miliona (māhina) mo e $180.5 miliona (ta’u). Na‘e makatu′unga eni mei he hū mai ‘a e ngaahi tokoni fakapa’anga ki he ngaahi polōseki ‘a e Pule’anga′, pea mo e ngaahi talafi pa’anga taautaha′. Ko e kake lahi ‘i he ta’u´ na’e makatu’unga ia mei he lahi ange ‘a e hū mai e ngaahi tokoni fakapa’anga ki he patiseti mo e ngaahi polōseki ‘a e Pule’anga′, ngaahi pa’anga nō mei muli′, pea mo e ngaahi talafi pa’anga taautaha mai mei hotau kainga ‘i muli´.
‘Oku kei malu pē ‘a e fai fatongia ‘a e ngaahi pangikee´, ‘o poupou ki ai ‘a e ‘i he tu’unga ma’olunga ‘a ‘enau pa‘anga tefito´ (capital), pehē ki he hulu ‘enau pa’anga ngāue´ (liquidity). Na’e tupu ‘a e ngaahi fakahū pa‘anga΄ (saving and demand) ‘i he māhina´ ‘aki ‘a e $6.3 miliona (peseti e 0.8). Neongo ia´, na’e kei holo pē ‘a e ngaahi nō kuo tuku atu΄ ‘aki ‘a e $2.7 miliona (peseti ‘e 0.6), tupu mei he lahi ange ‘a e ngaahi totongi nō ‘a e ngaahi pisinisi´ tautefito ki he pisinisi á e Pule’anga´. Tupu mei he hiki ‘a e lahi ‘o e ngaahi fakahū pa‘anga´ kae holo mo e ngaahi nō ne tuku atu´ , na’e toe holo ai ‘a e peseti ‘o e ngaahi nō ‘i hono fakahoa ki he fakahū paánga´ (loans/deposit ratio) ki he peseti ‘e 58.2 í Sepitema 2021, mei he peseti ‘e 59.0 í he māhina kuo‘osi´. ‘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.
‘Oku fakafuofua ‘e he Pangikē Pule΄ ‘e fakaakeake ‘a e ’ekonōmika fakalotofonua΄ ‘i he ta’u fakapa‘anga 2021/22. Ka neongo ia, óku kei ta’epau pē ‘a e tu’unga ‘oku ‘i ai ‘a e mahaki COVID-19 ‘oku mafola fakamāmani lahi΄ ‘a ia te ne malava uesia ‘a e fakafuofua ko eni΄. Neongo ‘oku ‘amanaki ‘e kei hikihiki pē ‘a e totongi ‘o e ngaahi koloa´, kā ‘oku fakafuofua ‘e fakataimi pē ‘a ‘ene hiki΄ pea holo leva ‘o ma‘ulalo ‘i he peseti ‘e 5 ‘i he kuata ‘uluaki ‘o e ta’u 2022. Ko e tu‘unga ‘o e pa‘anga talifaki ‘i mulí´ ‘oku ‘amanaki ‘e kei fakafiemālie pē ‘o lahi ange ‘i he māhina ‘e 3 ‘o e koloa mo e ngāue hū maiˊ. ‘Oku fakafuofua foki ‘e kei ‘i he tu’unga malu pē ‘a e sistemi fakapa’anga΄ tupu mei he hulu ‘o ‘enau pa‘anga ngāue΄ mo ‘enau sino‘i pa‘anga tefito´, pehē ki he māmālie ‘a e tupu ‘o e ngaahi nō. ‘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΄.
