- Decision
- Maintain
- Rate change
- 0 bps
- Policy rate after decision
- 0.25%
The Reserve Bank of Fiji (RBF) Board maintained the Overnight Policy Rate at 0.25 percent in July, citing slowing economic conditions and inflation driven by more expensive imports. The rate was also held at 0.25 percent in the provided decisions from July 2025 through June 2026. Financial conditions remained accommodative, with ample liquidity keeping lending rates low and supporting sustained private-sector credit growth. Annual inflation rose to 6.1 percent in June and is expected to remain above 6.0 percent through year-end if current oil prices persist, while tourism continued to support activity despite moderating growth momentum in other sectors and consumption. Foreign reserves remained adequate to cover 5.4 months of retained imports and are expected to stay comfortable over the medium term. The International Monetary Fund lowered its 2026 global growth forecast to 3.0 percent amid geopolitical tensions, elevated commodity prices and heightened uncertainty, while slower trading-partner growth and potential El Niño conditions pose additional downside risks. The RBF will monitor incoming information and align monetary policy if 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.