- Decision
- Maintain
- Rate change
- 0 bps
- Overnight policy rate
- 0.25%
The Board of the Reserve Bank of Fiji left the Overnight Policy Rate unchanged at 0.25 percent on 30 January, judging the current stance appropriate as headline inflation decelerated to 1.3 percent in December 2024 from 5.1 percent a year earlier while economic activity was buoyed by record tourist arrivals and solid gains in resource-based industries. Ample system liquidity of about FJD 2.2 billion and historically low lending rates underpinned an 11.4 percent rise in private-sector credit, and foreign reserves stood at USD 3.7 billion, covering 5.9 months of imports and expected to stay adequate. The central bank said it will keep monitoring domestic and global developments and stands ready to adjust policy to safeguard inflation and external stability.
Rate evolution
From June 2025 to September 2026, the Reserve Bank of Fiji kept the Overnight Policy Rate at 0.25%, maintaining support for economic activity. The holds through early 2026 reflected subdued inflation and adequate foreign reserves amid firm demand, and in February the Reserve Bank judged the rate appropriate as January headline inflation fell to -2.5% and core inflation stayed near 0.8%, while forecasting year-end headline inflation at 2.5%-3.0% and flagging risks from trade and Middle East tensions, commodity prices, electricity tariffs, elections, tourism demand and cyclone shocks.
By 25 June, the Board again held the rate as it balanced rising domestic prices, adequate foreign reserves and support for activity, noting that headline inflation had reached 3.9% and was expected at about 6.0% by year-end, while higher global fuel prices dampened travel demand and prompted a cut in the 2026 growth forecast to 1.5% from 3.0%. On 30 July, it maintained the rate as activity slowed and import costs lifted inflation to 6.1% in June, and on 27 August it held again to support activity and adequate reserves amid supply-driven inflation, which eased to 5.7% in July but was expected to remain elevated due to global fuel and freight costs.
On 24 September, the Board again held the rate, balancing heightened inflationary pressure driven largely by external factors with support for growth amid weakening conditions, as headline inflation rose to 7.6% in August from 5.7% in July on higher food, energy and kava prices and the fading effect of the August 2025 value-added tax rate reduction. Inflation was expected to remain above 6.0% through year-end amid volatile global commodity prices and weather risks from the developing El Niño event, while reserves of around FJD 3.9 billion covered 5.5 months of retained imports and economic activity tracked expectations on tourism, consumer spending and construction.