- Decision
- Maintain
- Rate change
- 0 bps
- Policy rate after decision
- 0.25%
The Reserve Bank of Fiji (RBF) maintained the Overnight Policy Rate at 0.25 percent on August 27 to support economic activity while preserving adequate foreign reserves amid supply-driven inflation pressures. The rate has remained at 0.25 percent in every cited decision since August 2025. Headline inflation eased to 5.7 percent in July from 6.1 percent in June but is expected to remain elevated as higher global fuel prices and freight costs pass through to domestic prices. The 2026 growth outlook remains positive, with recent indicators suggesting potential upside, while private sector credit grew 14.6 percent in July amid ample banking system liquidity. Foreign reserves stood at $3.9 billion, covering 5.5 months of retained imports, and are expected to remain adequate over the medium term, supported by government external loan drawdowns, tourism receipts and remittances. Geopolitical tensions and associated energy-market volatility pose risks to investment, inflation and reserves. The RBF will monitor developments and adjust policy as needed to maintain price stability and safeguard foreign reserves.
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.