The National Reserve Bank of Tonga’s Board of Directors at its first board meeting for the year, on the 31st of March 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 there was generally a domestic slowdown in January 2021. The primary sector reported a decline in total agricultural exports largely driven by the decrease in export of root crops such as cassava, taro, yam, and squash. Agricultural export proceeds also declined during January 2021 aligning with decline in volume of exports. Lending to the construction sector decreased coinciding with the decline in import payments for construction materials whilst growth in the services sector dropped further in January 2021. The total container registrations declined significantly as a result of both lower business and private container registrations indicating a slowdown in trading activities following the festive season.
Inflation increased by 0.7% in January 2021 due to higher imported and domestic prices (particularly fuel and food items). The annual inflation rate for January 2021 rose by 1.3%. This was due to both higher imported and domestic prices. Particularly, 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 rose in January 2021 by $29.7 million to $705.3 million and equivalent to 12.0 months of imports. This was due to receipt of a government loan from the IMF Rapid Credit Facility. Funds related to COVID-19 and TC Harold were also received. Similarly, foreign reserves increased significantly in the year to January 2021 by $222.4 million. This was largely a result of budget support, official grants, and remittances.
The total banking system maintained its soundness supported by strong capital and excess liquidity. The banks’ total lending slightly fell in the month whilst the level of deposits continued to rise. Consequently, the loans to deposit ratio was lower in January 2021, it fell to 67.8% from 68.6% last month and below the 80% minimum. The consistent decline of this ratio continues despite the excess liquidity in the system. The weighted average interest rate spread increased over the month by 1.0 basis points and declined by 32.8 basis points in the year to January 2021 to 5.709%.
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 31 ‘o Ma’asi 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 á e Kōvana ‘o e Pangikē Pule´, Sione Ngongo Kioa, na’e māmālie ange á e ngaahi ngāue faka’ekonōmika fakalotofonua´ ‘i Sanuali 2021. Í he vakai ki he sekitoa ngoue´, vaotātāa mo e toutai´, naé holo á e ngoue naé úta ki tuápuleánga´ tautefito ki he ngoue foha´ ó hange koe manioke´, talo´, úfi´, mo e hina´. Naé holo moe paánga hū mai mei he ngoue naé úta ki tuápuleánga´ í Sanuali 2021 ó fenēpasi pē moe holo á e ngoue naé úta ki tuápuleánga´. Naé holo á e ngaahi nō ne tuku atu΄ ki he sekitoa langa´ fakataha pē moe holo á e totongi paánga ki he koloa mo e naunau langa hū mai mei muli´. Naé toe holo ange á e sekitoa ngāue´ í Sanuali 2021. 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´ hili e ngaahi taimi katoanga´.
Na’e tupu peseti ‘e 0.7 ‘a e hikihiki fakata’u ‘o e totongi koloa΄ ‘i Sanuali 2021 makatuúnga mei he kake á e ngaahi totongi koloa hū mai mei muli΄ mo e ngaahi totongi fakalotofonua΄ (tautefito ki he lolo΄ mo e meákai΄). Na’e tupu peseti ‘e 1.3 ‘a e hikihiki fakata’u ‘o e totongi koloa΄ ‘i he ta’u΄ ki Sanuali 2021. Ko e hiki hake ko ’eni ne 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΄, mo e vala mo e ngaahi suu΄.
Ko e tu‘unga ‘o e pa‘anga talifaki ‘i muli´ (foreign reserves) naé tupu í Sanuali 2021 áki á e $29.7 miliona ki he $705.3 miliona, ‘o fe’unga ia mo e māhina ‘e 12.0 ó e ngaahi koloa mo e sevesi hū mai´. Na’e makatu’unga ‘a e tupu lahi ko eni´ mei he hū mai á e nō ‘a e Puleánga´ mei he polokalama tokoni fakavavevave á e Kautaha Fakapaánga Fakavahaápuleánga (International Monetary Fund). Naé toe hū mai moe ngaahi tokoni kehe ki he COVID-19 pea mo e Saikolone Haloti. Naé toe tupu lahi á e tu‘unga ‘o e pa‘anga talifaki ‘i muli´ í he taú ki Sanuali 2021 áki á e $222.4 miliona. Naé 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 hulu ‘enau pa’anga ngāue´ (liquidity). Na’e holo ‘a e ngaahi nō ne tuku atu΄ he māhina´, kae tupu á e ngaahi fakahū pa‘anga´. Í heéne pehē, naé toe holo hifo ‘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 67.8 mei he peseti é 68.6 í he māhina kuo ósi´, ó kei ma‘ulalo pē ‘i he tu’unga ma’ulalo taha ‘oku tu’utu’uni’i´ ‘a ia ko e peseti ‘e 80. 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 hiki hake í he māhina´ áki á e peseti poini é 1.0, kae holo ‘i he ta’u´ ki Sanuali 2021 áki á e peseti poini e 32.8 ki he peseti ‘e 5.709.
‘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΄. ‘Oku fakafuofua ke toki kamata e fakaakeake ‘a e tu’unga faka’ekonōmika΄ ‘i he 2021/22. ‘Oku fakafuofua ‘e fakafiemālie pē ‘a e tu’unga ó e pa‘anga talifaki ‘i mulí´ ‘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΄, 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΄.
