- Decision
- Maintain
- Rate change
- 0 bps
- Overnight policy rate
- 0.25%
The Reserve Bank of Fiji on 27 March 2025 kept its Overnight Policy Rate unchanged at 0.25 percent, citing a benign outlook for both of its policy objectives as annual inflation cooled to 1.4 percent in February from January’s flood-distorted 4.0 percent while foreign reserves remained strong at FJD 3.5 billion, covering 5.6 months of imports. The benchmark rate has been steady at 0.25 percent since at least January 2025. System liquidity stayed ample at FJD 1.9 billion, supporting low lending rates. Domestically, visitor arrivals fell 3.8 percent in the first two months of the year but consumption was buoyed by robust VAT receipts and double-digit growth in new consumer loans, and investment indicators such as bank loans for investment and building permits improved. Externally, reserves are projected to remain sufficient despite softer tourism inflows, while heightened global inflation and trade frictions are flagged as downside risks. The central bank will reassess conditions at its next policy meeting on 24 April 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.