- Decision
- Maintain
- Rate change
- 0 bps
- Policy rate after decision
- 0.25%
The Reserve Bank of Fiji (RBF) held the Overnight Policy Rate at 0.25% in September, balancing heightened, largely externally driven inflation against the need to support growth amid weakening conditions. The rate has remained at 0.25% since September 2025. Headline inflation rose to 7.6% in August and is expected to remain above 6% through year-end, reflecting higher food, energy and kava prices, fading effects from the August 2025 VAT reduction, commodity-price volatility and El Niño-related weather risks. The economy expanded by 2.5% in 2025, while indicators suggest 2026 growth is broadly in line with forecast, supported by tourism, consumer spending and construction, with ample banking-system liquidity maintaining relatively low lending rates and supporting private-sector credit. Foreign reserves covered 5.5 months of retained imports as of September 23, supported by tourism and remittance inflows and government external loan drawdowns, and are expected to remain adequate over the medium term. The RBF said risks to the outlook had become more challenging and will adjust monetary policy where necessary to maintain price stability and preserve reserve adequacy.
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.