- Decision
- Maintain
- Rate change
- 0 bps
- Overnight policy rate
- 0.25%
The Reserve Bank of Fiji (RBF) left the Overnight Policy Rate unchanged at 0.25 percent at its 26 February 2026 meeting, judging the existing stance appropriate amid negative headline inflation, solid domestic demand and comfortable foreign-reserve buffers. The rate has been held at 0.25 percent since at least January 2025. System liquidity remains ample at FJD 1.9 billion, keeping lending rates near historic lows. Annual headline inflation was ‑2.5 percent in January, while core inflation measured 0.8 percent; the Bank expects headline inflation to rebound gradually to 2.5–3.0 percent by end-2026. The economy is projected to expand by 3.0 percent this year, underpinned by record January visitor arrivals, robust consumption and a 10.5 percent rise in private-sector credit. Foreign reserves stand at FJD 3.6 billion, covering 5.3 months of imports and are forecast to remain adequate. The Board flagged risks from potential commodity-price spikes linked to Middle-East tensions and the ongoing cyclone season, and reiterated it will adjust policy if required to safeguard its inflation and reserves objectives.
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.