The August 2024 MPS maintains the current monetary policy that keeps a watchful eye against inflation threats and supports economic recovery through maintaining the statutory required deposit at 15% and the zero-percent monetary policy rate while considering easing exchange control requirements and maintaining an exchange rate regime that supports greater macroeconomic stability. In collaboration with Government and other relevant stakeholders, the NRBT is introducing new financing instruments such as a concessional credit facility and a partial credit guarantee scheme to boost private sector financing towards stronger growth recovery in 2025, particularly fostering access to financing for underserved and climate change-vulnerable sectors.

Governor Moeaki stated that “Tonga’s economic growth for FY2024 has been revised downward to 1.6% from the previously projected 2.2% primarily due to underperformance in the primary and secondary sectors. This follows moderate growth in FY 2023 following the double disasters in 2022 and reflects the need for the financial sector to be more responsive to the growth sectors and the private sector growth with a watchful eye on inflation.”

Headline inflation has eased from the past year’s high levels, and despite exceeding the 5% reference rate in June 2024, it is considered transitory as core inflation remains low at 1.7%. The uptick in headline inflation in June 2024 was mainly driven by ever increasing local food prices. Domestic food prices increased annually by 23.9% in June 2024 after having grown by 22.7% in June 2023. This is a reflection of the supply shortages experienced by the agriculture sector due to natural disasters and the recent El Nino. The Reserve Bank expects inflation to revert below the reference rate as supply improves. Nevertheless, Tonga remains vulnerable to local food price volatility due to its susceptibility to natural disasters, labour market mismatches, rising energy prices, and external shocks. To alleviate Tonga's high cost structure and address supply constraints, closer collaboration between the Reserve Bank and Government on necessary reforms is crucial for maintaining price stability.

Foreign reserves remains robust exceeding the 7.5 months of import cover standing at $909.1 million by July 2024, equivalent to 10.5 months of import cover. The banking system is supportive of economic growth, with annual credit growth of 4.1% in June 2024. However, non-performing loans remains elevated to 11.2%. Enhanced supervision of banks and non-bank financial institutions are ongoing to mitigate financial stability risks. The NRBT will continue to closely monitor both global and domestic economic developments and align its monetary policy as needed.

 

+ - Press Release in Tongan Click to collapse

Tokanga ‘a e Pangikē Pule΄ ke faka’ai’ai hono ngaue’aki ‘a e ngāue fakapa‘anga ‘i he‘ene fokotu‘utu‘u ngaue fakapa‘anga ‘Aokosi 2024

Kuo tuku atu ‘a e Fakamatala Fokotu‘utu‘u Ngāue Fakapa’anga ‘o ‘Aokosi 2024 ‘o e Pangikē Pule Fakafonua ‘a Tonga hili hono tali ia ‘e he Poate ‘a e kau Talēkita.

‘Oku kei hoko atu pē ‘a e tokanga ‘a e Fokotu’utu’u Ngāue Fakapa‘anga ‘Aokosi 2024 ki he hikihiki ‘a e totongi koloa΄ pea mo hono poupou’i ‘a e fakaakeake faka’ekonōmika΄ ‘aki hono tauhi pē ‘i he peseti ‘e 15 ‘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´, hoko atu pē hono ta’etotongi ha tupu (interest) ‘i he ngaahi ‘akauni pa‘anga ngāue ‘a e ngaahi pangikee´ ‘oku fakahū ‘i he Pangikē Pule´, pea ke vakai’i ‘a e ngaahi tu’utu’uni ki he fakafetongi pa’anga muli΄ ke toe faingofua ange pea mo tauhi ‘a e tu’unga mālohi ‘o e fakafetongi pa’anga΄ ke poupou ki hono fakamālohia ‘a e ma’uma’uluta faka’ekonomika fakalūkufua΄. ‘I he fengāue‘aki vāofi mo e Pule’anga΄ mo e ngaahi kupu kehekehe fekau’aki, ‘e fokotu’u ai ‘e he Pangikē Pule΄ ha ngaahi polokalama fakapa’anga fo’ou ‘o hangē ko ha polokalama nō ‘oku tuku atu ‘i ha totongi tupu ‘oku ma’ulalo (concessional credit), pea mo ha polokalama ki hono malu’i ‘a e ngaahi nō (credit guarantees). Ko e fakataumu’a ‘eni ke fakaivia ‘a e sekitoa taautaha΄ ke toe malohi ange ‘a e tupu faka’ekonōmika΄ ‘i he 2025΄ pea faka‘ai‘ai ‘a e nō ki he ngaahi sekitoa ‘oku ‘ikai ke lahi ha’anau faingamalie nō mei he ngaahi pangikē, mo kinautolu ‘oku tu’u laveangofua ki he feliuliuaki ‘a e ‘ea΄.

‘I he fakamatala ‘a Kōvana Moeaki΄, “na’e holoki ki he peseti ‘e 1.6 ‘a e fakafuofua ki he tupu faka‘ekonōmika ‘a Tonga ki he ta‘u fakapa‘anga 2024 mei΄he tupu peseti ‘e 2.2΄, makatu‘unga mei΄he ’ikai ola lelei ‘a e sekitoa ngoue΄, vaotātā mo e toutai΄ mo e tafa‘aki fakatupu koloa΄. Ko e hili ia ha tupu māmālie ‘i he ta‘u fakapa‘anga 2023΄ hili ‘a e ongo fakatamaki ‘i he 2022΄. ‘Oku hā mai heni ‘a e fiema‘u ‘a e tokoni mei he sekitoa fakapa‘anga΄ke fakaivia fakapa’anga ‘a e tupu ‘a e sekitoa taautaha΄ pea moe ngaahi sekitoa kehe΄ kae kei tokangaekina pe ‘a e hikihiki ‘i he totongi koloa΄”.

Kuo holo ‘a e hikihiki ‘i he totongi koloa fakalukufua՛ mei he tu’unga ma’olunga ‘i he ngaahi ta’u kuo hili΄ pea neongo ne a’u mai ki Sune 2024 na’e ma’olunga ange ‘i he tu’unga ‘oku faka’amu ke ‘i ai ko e peseti ‘e 5, ‘oku fakafuofua ‘e toe holo pē, koe‘uhi΄ ‘oku kei peseti ‘e 1.7 ‘a e hikihiki ‘i he totongi ‘o e ngaahi koloa tefito´ (‘ikai ke kau ai e totongi koloa me’akai´ mo e ma‘u‘anga ivi). Ko e kake ‘a e hikihiki ‘i he totongi koloa fakalūkufua΄ ‘i Sune 2024 na’e makatu’unga ia mei he hiki ‘i he totongi koloa me’akai fakalotofonua΄, ‘a ia ne hiki ‘aki ‘a e peseti ‘e 23.9 ‘i he ta’u ki Sune 2024΄, hili ia ‘ene hiki peseti ‘e 22.7 ‘i Sune 2023. ‘Oku ho’ata mei heni ‘a e si’isi’i e koloa mei he sekitoa ngoue΄, makatu’unga mei he ngaahi fakatamaki fakaenatula´ pea pehē ki he fa’ahi ta’u la‘ala‘ā (El Nino) ne toki ‘osi΄. ‘Oku fakafuofua ‘a e Pangikē Pule΄ ‘e holo ‘a e hikihiki e totongi koloa´ ‘o ma’ulalo ‘i he tu’unga ‘oku faka’amu ke ‘i ai΄ ‘o fakatefito ‘i ha toe lelei ange e koloa ‘oku tuku mai΄. Ka neongo ia՛, ‘oku kei tu’u laveangofua pē ‘a Tonga ki he ngaahi feliuliuaki ‘i he totongi koloa me’akai fakalotofonua΄ tupu mei he ngaahi fakatamaki fakaenatula´, nounou fakakaungaue΄, hikihiki ‘a e totongi e koloa ma‘u‘anga ivi´, pea mo ha ngaahi pole mei tu’apule’anga. ‘Oku fiema’u ke toe vāofi ange ‘a e fangaue’aki ‘a e Pangikē Pule΄ mo e Pule’anga΄ ki hono holoki ‘a e tu’unga ma’olunga ‘o e totongi koloa΄ mo fakalelei’i ‘a e fe’amokaki ‘i he tu’unga ‘o e fo’u koloa΄ kae lava ‘o tauhi ‘a e hikihiki ‘i he totongi koloa΄ ke ma’ulalo.

‘Oku kei ‘i he tu’unga ma’olunga pē ‘a e pa‘anga talifaki ‘i muli ‘a e fonuaˊ, ‘o laka hake ‘i he māhina ‘e 7.5 ‘o e koloa hū mai΄, ‘a ia na’e fe’unga mo e $909.1 miliona ‘i Siulai 2024ˊ, pea ‘oku fe‘unga eni mo e koloa hū mai ki he māhina ‘e 10.5. Na’e tokoni ‘a e tafa’aki fakapa’angaˊ ki he tupu faka’ekonōmikaˊ, ‘i he tupu fakata’u ‘a e nōˊ ‘aki ‘a e peseti ‘e 4.1 ‘i Sune 2024ˊ. Ka neongo ia, ‘oku kei ma’olunga pē ‘a e ngaahi nō palopalema´ ‘i he peseti ‘e 11.2. ‘Oku hokohoko atu ai pē ‘a hono tokangaekina ‘o e ngaahi pangikē´, pea pehē ki he ngaahi kautaha ‘ikai ko ha pangikē´, ke fakasi’isi’i ha ngaahi uesia ‘e malava ke hoko ki he tu’unga malu ‘o e tafa’aki fakapa’anga´. ‘E
hokohoko atu ai pē ‘a hono muimui’i ofi ‘e he Pangikē Pule´ ‘a e ngaahi fakalakalaka faka’ekonōmika fakamāmani lahi´ pea pehē ki he fakalotofonua´, pea ke liliu ‘ene ngaahi tu’utu’uni ngāue fakapa’anga´, ‘oka fiema’u.