- Decision
- Maintain
- Rate change
- 0 bps
- Overnight policy rate
- 0.25%
The Reserve Bank of Fiji on 25 September left its Overnight Policy Rate (OPR) unchanged at 0.25 percent, judging that a still-negative headline inflation rate (-3.5 percent y/y in August after ‑1.5 percent in July, far below 3.8 percent a year earlier) and foreign-reserve adequacy allowed it to maintain an accommodative stance while watching risks from geopolitical tensions, global commodity prices and the incoming cyclone season. The OPR has been steady at 0.25 percent throughout 2025, including the August decision. Banking system conditions remain loose, with FJD 2.2 billion in liquidity as of 24 September supporting favourable lending rates and firm credit growth. The economy expanded 3.5 percent in 2024 following 9.4 percent in 2023 and is projected to grow 3.2 percent in 2025, underpinned by services, agriculture and manufacturing, resilient consumption—evident in higher net VAT collections, vehicle registrations and consumption lending—and early signs of improving investment via building permits and construction imports. Foreign reserves stand at about USD 3.8 billion (covering six months of imports) and are expected to stay comfortable, while visitor arrivals rose 0.4 percent in the year to August amid a pickup from key markets. The central bank reiterated that it will continue to monitor domestic and global developments and adjust policy settings as required.
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.