The Reserve Bank maintained its accommodative monetary policy stance which supported the monetary policy objectives of maintaining internal and external monetary stability, promoting financial stability and a sound and efficient financial system and conducting its activities in a manner that supports macroeconomic stability and economic growth.
- Monetary Policy Statement: August 2018 PDF 1,674 KB DOWNLOAD THE FULL STATEMENT
The Reserve Banks’ nowcast for a stronger real Gross Domestic Product (GDP) growth of 3.1% in 2017/18 remains. The favorable growth is anticipated to be led by the trade, agricultural, utility, fisheries, transport & communication and ownership of dwellings sectors. Strong growth in 2017/18 is supported mainly by the implementation of infrastructure projects and ongoing housing construction projects, upgraded power supply, and improved performance in the above-mentioned sectors despite the impact of Tropical Cyclone (TC) Gita. The agricultural production further increased over the year which was attributed mainly to the favourable weather conditions resulting in better yields for squash, taro, yam, and watermelon before TC Gita struck Tonga. According to the Domestic Market Survey Report for 2017/18, the total agricultural produce available for sale at the domestic market increased when compared to 2016/17. The total agricultural export volume also rose over the year to June 2018 driven mainly by higher exported volumes of squash followed by the exports of taro and yam.
The annual headline inflation remained high over the past several months since a hike to 9.8% in March 2018, mainly driven by local prices due to the impact of Tropical Cyclone (TC) Gita on the local food supply. However, in August 2018, the annual headline inflation rate slowed to 5.7%.
Over the past six months to August 2018, the overall Overseas Exchange Transactions (OET) balance recorded a surplus of $27.0 million. This corresponds to an increase in the foreign reserves from $448.0 million in February 2018 to $475.0 million in August 2018. This was sufficient to cover 7.7 months of import of merchandise goods and services1, which remained above the Reserve Bank’s minimum of 3 months of import. The level of foreign reserves is expected to remain at comfortable levels well above the minimum of 3 months of import cover supported by expected higher receipts of budgetary support and grant funds from development partners and expected higher receipts of remittances. This will be partially offset by the projected rise in imports.
The banking system continued to remain sound. A strong capital position was maintained, supported by banks’ comfortable profitability, high liquidity, and low non-performing loans. The total banks’ lending reached a new high record in August 2018. Similarly, the deposits continued to rise to new heights which are in line with the increase in the foreign reserves.
The banks’ total loans to deposit ratio remained below the 80% minimum loan to deposit ratio at 71.5%, compared to 74.3% in February 2018 and 75.2% in August 2017. This was attributed mainly to deposits increasing at a faster pace than the growth in loans, which indicates that there is excess liquidity and capacity for further lending by the banks. The Reserve Bank will continue to monitor the lending growth to avoid any overheating in the economy and any potential threat to financial stability.
The net credit to Government from the banking system data rose over the past six months, due to a decrease in Government deposits. The payout of the Government’s TC Gita recovery assistance, the implementation of donor-funded projects and the delay in budget support receipts that was expected before June 2018 may have contributed to this lower deposits. However, net credit to the Government is anticipated to decrease in the near term as a result of expected Government budgetary support and Government grants receipts, as well as improved Government revenue collection. The Reserve Bank will closely monitor the implication of the fiscal policy measures on the monetary policy objectives.
Given the recent developments and the outlook on the monetary policy targets, the current monetary policy stance is considered appropriate in the medium term. Therefore, the Reserve Bank will maintain its current monetary policy measures in the medium term in order to encourage the utilisation of the excess liquidity in the banking system to increase lending, particularly to the growth sectors, in order to support domestic economic growth and the recovery from TC Gita, and strengthen the monetary policy transmission mechanism. Furthermore, the Reserve Bank will continue to closely monitor developments in the domestic and global economy, and update its monetary policy setting to maintain internal and external monetary stability and to promote a sound and efficient financial system in order to support macroeconomic stability and economic growth.
Fakamatala Fokotu’utu’u ngāue fakapa’anga ki ‘Aokosi 2018
Na‘e tali ‘e he Poate ‘a e kau Talēkita ‘a e Pangikē Pule Fakafonua ‘o Tonga΄ ‘i he’enau fakataha na’e fakahoko ‘i he ‘aho 20 ‘o Tisema 2018, ke tuku atu ‘e he Pangikē Pule Fakafonua ‘a Tonga΄ ‘a e Fakamatala Fokotu’utu’u Ngāue Fakapa’anga ki ‘Aokosi 2018. Ko e fakamatala ko ‘eni΄ ‘oku hā atu ai ‘a e vakai ki he ngaahi fakalakalaka faka’ekonōmika ‘i Tonga ni΄ mo e founga ngāue ‘a e Pangikē Pule΄ ‘i he māhina ‘e ono ki ‘Aokosi 2018. ‘Oku toe tuku atu foki ‘e he Fakamatala ko ‘eni΄ ‘a e fakafuofua ‘a e Pangikē Pule΄ ki he kaha’u΄.
‘Oku kei hokohoko atu ai pē ‘a e ngaahi fokotu’utu’u ngāue fakapa’anga lolotonga ‘a e Pangikē Pule΄ ke faka’ai’ai mo pāotoloaki ‘a e ngaahi ngāue faka’ekonōmika ‘a e fonua΄. ‘Oku taumu’a ‘a e ngaahi tefito’i tu’utu’uni fakapa’anga΄ni ke siofi mo muimui’i ofi e ngaahi fakalakalaka faka’ekonōmika fakalotofonua΄ mo tu’apule’anga΄, tokangaekina e ngaahi fokotu’utu’u ngāue fakapa’anga΄ ke pukepuke e ma’uma’uluta ‘a e tu’unga fakapa’anga΄ pea mo langa hake ha sisitemi fakapa’anga ‘oku malu mo lelei.
‘Oku kei tu’uma’u pē ‘a e fakafuofua ‘a e Pangikē Pule ‘e mālohi ‘a e tupu faka’ekonōmika fakalotofonua΄ ‘aki ‘a e peseti ‘e 3.1 ‘i he ta’u fakapa’anga 2017/18. ‘Oku fakafuofua koe tupu faka’ekonōmika ko ‘eni΄ ‘e fakatefito ia mei he ngaahi fakalakalaka ‘i he sekitoa fefakatau‘aki΄, ngoue΄, ngaahi fiema‘u faka‘api΄, toutai΄, fefononga‘aki mo e fetu‘utaki΄, pea pehee foki ‘i he sekitoa ‘oe ngaahi ‘api nofo‘anga΄. Ko e tupu malohi ‘o e 2017/18 na‘e tokoni ki ai ‘a e ngaahi ngāue poloseki lalahi‘, langa fale΄, fakalelei’i ‘o e ngaahi laine ma‘u‘anga ‘uhila΄, pea mo e toe lelei ange pe ola ‘o e ngaahi sekitoa ni neongo ‘a e maumau ne fakahoko ‘e he saikolone Gita. Na‘e hiki hake ‘a e ola ‘o e ngoue ‘i he faka‘osinga ‘o e ta‘u΄ ‘o makatu‘unga mei he tu‘unga lelei ‘o e ‘ea΄ ‘o ola lelei ai ‘a e fua ‘o e hina΄, talo΄, ‘ufi΄ mo e meleni΄ kimu‘a pea ‘ahia ‘e saikolone Gita ‘a Tonga ni. Fakatatau ki he lipooti savea ‘o e maketi fakalotofonua΄ na‘e hiki hake ‘a e lahi ‘o e ngoue na‘e fakatau ‘atu ‘i he maketi fakalotofonua΄ ‘i he 2017/18 ‘o fakahoa ki he 2016/17. Na’e hiki hake mo e lahi ‘o e ngoue ne uta atu ki tu’apule‘anga΄ ‘i faka’osinga ‘o e ta‘u΄ ki Sune 2018 ‘o makatu‘unga mei he lahi ange ‘a e uta atu ‘o e hina΄, talo΄, pea mo e ‘ufi΄.
Na‘e kei ma‘olunga pe ‘a e hikihiki ‘i he totongi fakalūkufua ‘o e koloa΄ ‘i he ngaahi mahina ne hoko atu ‘i Ma‘asi 2018 ‘ai ne peseti ‘e 9.8 ai ‘a e hikihiki ‘i he totongi fakalūkufua ‘o e koloa΄. Na‘e makatu‘unga pe ia ‘i he ngaahi totongi koloa fakalotofonua΄ koe‘uhi΄ ko e ngaahi maumau ne fakahoko ‘e saikoloni Gita ki he ngoue ne uesia ai ‘a e lahi ‘o e me‘akai fakalotofonua΄. Ka neongo ia, na’e holo māmālie ‘a e totongi koloa fakata’u΄ ki he peseti ‘e 5.7 ‘i ‘Aokosi 2018.
‘I he māhina ‘e 6 kuo’osi ki ‘Aokosi 2018, na’e tokoni ‘a e hulu $27.0 miliona ‘i he palanisi fakalūkufua ‘o e fehū’aki pa’anga mo muli΄, ki he hiki hake ‘i he tu’unga ‘o e pa’anga talifaki ‘a e pule’anga΄ ‘i muli΄ ki he $475.0 miliona ‘i ‘Aokosi 2018 ‘o fakahoa ki he $448.0 miliona ‘i Fepueli 2018. Na‘e fe‘unga ‘a e tu‘unga ‘o e pa’anga talifaki΄ pea mo e māhina ‘e 7.7 ‘o e koloa mo e ngaahi ngāue hū mai mei muli΄1, ‘a ia ‘oku kei ma’olunga ‘aupito pē ‘eni ‘i he tu’unga fe’unga ‘oku fiema’u ‘e he Pangikē Pule΄, ko e māhina ‘e 3 ‘o e koloa mo e ngaahi ngāue hū mai mei muli΄. ‘Oku fakafuofua ‘e kei ‘i he tu’unga fakafiemālie ai pē ‘a e pa’anga talifaki ‘i muli ‘a e pule’anga΄ makatu’unga mei he fakafuofua ‘e toe lahiange ‘a e ngaahi pa’anga tokoni fakapatiseti moe tokoni ki he Pule’anga΄ mei he ngaahi hoa ngāue fakalakalaka ‘a e fonua΄, pea mo e lī pa’anga mai mei muli΄ neongo ‘oku fakafuofua ‘e toe hiki hake mo e lahi ‘o e hū koloa mei muli΄.
Na’e ‘i he tu’unga fakafiemālie΄ pē ‘a e ngaahi pangikē, ne kei ‘i he tu’unga lelei pe ‘a e sino’i pa’anga tefito (capital) ‘a e ngaahi pangikē makatu’unga mei he tu’unga ma’olunga ‘a e tupu fakapa’anga΄ (profitability), pa’anga ngāue (liquidity) ‘a e ngaahi pangikē, pea mo e kei ma’ulalo ‘a e ngaahi nō palopalema΄. Na‘e toe lahi ange ‘a e ngaahi nō kuo tuku atu ‘e he ngaahi pangikē ‘o a’u ki ha ‘tu’unga ma‘olunga fo’ou, i ‘Aokosi 2018. Na‘e toe lahi ange mo e fakahū pa’anga ki he ngaahi pangikē ‘o fenāpasi mo e hiki hake ‘a e pa‘anga talifaki ‘a e pule‘anga΄ ‘i muli΄.
Na‘e peseti ‘e 71.5 ‘a e lahi ‘o e ngaahi nō ‘i hono fakahoa ki he lahi ‘o e ngaahi fakahū pa’anga΄ (loan/deposit ratio), ‘o fakahoa ki he peseti ‘e 74.3 ‘i Fepueli 2018 pea mo e peseti ‘e 75.2 ‘i ‘Aokosi 2017 ‘a ia ‘oku kei ma’ulalo pē ‘i he peseti ‘e 80 kuo tu’utu’uni ‘e he Pangikē Pule΄. Na‘e makatu‘unga ia mei he vave ange ‘a e tupu e ngaahi fakahū pa’anga΄ ‘i he ngaahi nō kuo tuku atu´, ‘o hā mahino mei heni ‘a e kei ‘i ai pē ‘a e faingamālie ke toe fakalahi ‘a e ngaahi nō ke tuku atu ‘e he ngaahi pangikē. ‘E kei hokohoko atu pē ‘a hono siofi ‘e he Pangikē Pule΄ ‘a e tupu ‘i he ngaahi nō ke fakapapau’i ‘e ‘ikai ke kaunga kovi ki he tupu faka’ekonōmika ‘a e fonua΄ pe ‘e ‘i ai ha’ane uesia e fa‘unga ‘o e ngaahi ngāue fakapa‘anga΄.
Na’e hiki hake ‘a e lahi e pa’anga ‘e totongi fakafoki ‘e he ngaahi pangike΄ ki he Pule’anga΄ ‘i he māhina ‘e 6 kuohili΄ makatu‘unga mei he holo ‘a e fakahū pa‘anga ‘a e Pule‘anga΄. ‘Oku fakatefito ‘a e holo e fakahū pa‘anga ‘a e Pule‘anga΄mei he ngaahi tufa pa‘anga tokoni afaa ‘i he ‘osi ‘a e saikolone Gita, kamata ‘a e ngaahi ngaue poloseki lalahi, pea mo e toloi ‘o e tokoni fakapatiseti na‘e ‘amanaki ‘e ma‘u ‘i Sune 2018. Kaekehe, ‘oku fakafuofua ke holo 'a e lahi e pa’anga ‘e totongi fakafoki ‘e he ngaahi pangike΄ ki he Pule’anga΄ ‘i he kaha’u vave mai΄, makatu’unga mei he ngaahi pa’anga tokoni fakapatiseti mo e tokoni ki he Pule’anga΄ ‘a ia ‘oku ‘amanaki ‘e hū mai΄, kae pehee foki ki he toe lelei ange ‘a e tānaki pa’anga hū mai ‘a e Pule’anga΄. ‘E kei hokohoko atu ai pe ‘a hono siofi ‘e he Pangikē Pule΄ ‘a hono ngāue’aki ‘o e ngaahi me’afua tu’utu’uni ngāue ‘a e Pule’anga΄ ‘i he ngaahi ta’umu’a ngāue fakapa’anga΄.
Koe’uhi΄ ko e fakafiemālie ‘a e ngaahi fakalakalaka ki mui ni΄ pea mo e fakafuofua ki he kaha’u΄ e kei hokohoko atu ai pē ‘a hono ngāue’aki ‘a e ngaahi fokotu’utu’u ngaue fakapa’anga lolotonga΄. ‘E kei hoko atu pe hono ngaue‘aki ‘e he Pangikē Pule´ ‘a e ngaahi fokotu’utu’u ngaue fakapa’anga lolotonga΄ ‘o fakataumu’a ke ngāue’aki ‘a e hulu ‘i he pa’anga ngāue ‘a e ngaahi pangikē ‘aki hono faka‘ai‘ai e ngaahi pangikē ke toe fakalahi ‘a e ngaahi nō ‘oku tuku atu΄ kae tautefito ki he ngaahi sekitoa ‘oku tupu΄. Koe’uhi΄ ke poupou ki he tupu faka’ekonōmika fakalotofonua΄, fakaakeake mei he saikolone Gita, pea mo fakalelei‘i ‘a e fokotu’utu’u ngaue fakapa’anga ke ma’uma’uluta mo tolonga. Pea ‘e kei hokohoko atu ai pē ‘a e tokanga ‘a e Pangikē Pule´ ki hono muimui’i ofi e ngaahi fakalakalaka faka’ekonōmika fakalotofonua´ mo tu’apule’anga´, mo tu’u mateuteu ke liliu ‘a e ngaahi fokotu’utu’u ngāue fakapa’anga ‘o ka fiema’u ke tauhi e ma’uma’uluta ‘a e tu’unga fakapa’anga΄ pea mo langa hake ha sisitemi fakapa’anga ‘oku malu mo lelei ke tokoni ki he ma’uma’uluta mo e tupu faka’ekonōmika ‘a e fonua΄.
