- Decision
- Maintain
- Rate change
- 0 bps
- Overnight policy rate
- 0.25%
The Reserve Bank of Fiji (RBF) Board on 29 January kept the Overnight Policy Rate (OPR) unchanged at 0.25 percent, judging that zero inflation in 2025, a projected pickup to about 2.5 percent in 2026 and still-comfortable foreign reserves warrant an unchanged accommodative stance. The OPR has been steady at 0.25 percent since at least January 2025. Banking‐system liquidity remains ample at FJD 2.0 billion (28 January), helping to hold interest rates low and support an 8.4 percent rise in private-sector credit last year. Headline inflation ended 2025 at 0.0 percent, held down by cheaper fuel and gas, while foreign reserves stand at FJD 3.7 billion—covering 5.4 months of imports—and are expected to stay adequate. The economy is forecast to expand 3.0 percent in 2026, underpinned by a projected 2.0 percent increase in visitor arrivals after tourism growth slowed to 0.3 percent in 2025; consumption remains buoyant on higher incomes, remittances and bank lending. Globally, heightened geopolitical and trade tensions pose downside risks, while a potential domestic electricity tariff hike could add to price pressures. The central bank pledged to keep monitoring global and domestic developments and align its 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.