- Decision
- Maintain
- Rate change
- 0 bps
- Policy rate after decision
- 0.25%
The Reserve Bank of Fiji kept the Overnight Policy Rate unchanged at 0.25%, saying monetary policy must balance elevated domestic prices, the need to maintain adequate foreign reserves and support for economic activity, with slowing growth and inflation driven by higher imported costs arguing against adding pressure to borrowing costs. Headline consumer prices were 3.9% higher than a year earlier and the central bank still expects inflation to reach about 6.0% by year-end, while tourism continues to support activity but higher global fuel prices have dampened travel demand and prompted a downward revision to the 2026 growth forecast to 1.5%. The financial system remained supportive of activity, with ample liquidity of FJD 1.6 billion and sustained private sector lending growth. Foreign reserves stood at around FJD 3.4 billion, covering 4.7 months of retained imports, and the Reserve Bank of Fiji said they should remain adequate in the near to medium term, partly supported by government loan drawdowns from international partners and helping support stability in the Fijian dollar. The central bank said the inflation outlook will depend on whether the Iran-US agreement holds, whether geopolitical tensions ease and how quickly global oil markets normalise, and it will continue to monitor global and domestic developments, including the national budget, and act as needed to safeguard macroeconomic stability.
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.