- Decision
- Maintain
- Rate change
- 0 bps
- Overnight policy rate
- 0.25%
The Reserve Bank of Fiji (RBF) left its Overnight Policy Rate unchanged at 0.25 percent at its 28 August 2025 meeting, judging that a second consecutive month of negative inflation (-0.4 percent y/y in July after ‑0.6 percent in June and 6.8 percent a year earlier) and foreign-reserve adequacy ($3.9 bn, about six months of imports) keep its twin objectives of price stability and external viability intact. The policy rate has been steady at 0.25 percent since at least January 2025. System liquidity remains high at about FJD 2.2 bn, underpinning a 9.5 percent rise in private-sector credit and strong consumption indicators, including VAT collections up 5.4 percent and vehicle registrations up 22 percent in the year to July, even as elevated building-material costs and modest 1.4 percent growth in investment lending temper the investment recovery. Visitor arrivals fell 0.4 percent in the year to July but have recorded four months of year-on-year growth, and tourism prospects are bolstered by lower VAT rates. The Board noted external uncertainties from global trade and geopolitical risks and pledged to keep monitoring domestic and international conditions, adjusting policy as needed.
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.