- Decision
- Maintain
- Rate change
- 0 bps
- Overnight policy rate
- 0.25%
The Reserve Bank of Fiji left its Overnight Policy Rate unchanged at 0.25 percent, citing comfortable inflation and foreign-reserve positions despite headline inflation jumping to 4.0 percent in January from 1.3 percent in December after flood-related food price spikes. The rate was also held at 0.25 percent in January. System liquidity remains ample at FJD2.1 billion and lending rates are near historical lows, supporting an 11.8 percent rise in private-sector credit. Foreign reserves stand at FJD3.6 billion, covering 5.8 months of imports and projected to stay adequate, while January visitor arrivals hit a record 70,794, up 0.7 percent, underpinning robust VAT collections and investment lending. The Board flagged rising geopolitical risks and higher global trade tariffs, which could lower imported goods prices yet weigh on US demand for Fijian exports. It will reassess policy at its next meeting on 27 March 2025.
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.