- Decision
- Maintain
- Rate change
- 0 bps
- Overnight policy rate
- 0.25%
The Reserve Bank of Fiji (RBF) held its Overnight Policy Rate at 0.25% to support economic activity and preserve adequate foreign reserves while managing inflation driven mainly by higher import costs, extending a series of holds at that level since October 2025. Annual headline inflation eased to 6.8% in September from 7.6% in August but is expected to remain above 6.0% at year-end, partly reflecting El Niño-related pressures on domestic food prices. Economic growth in 2026 is expected to exceed the 1.5% forecast, supported by better-than-expected tourism, positive consumption spending and improved investment and construction activity, although El Niño poses downside risks to growth in 2027. Private sector credit continued to grow strongly, supported by ample liquidity and low interest rates. Foreign reserves covered 5.6 months of retained imports as of 28 October and are expected to remain adequate over the medium term, underpinned by government external financing and tourism receipts. Persistently high global commodity prices continue to fuel inflation, while ongoing geopolitical tensions pose downside risks to the macroeconomic outlook. The RBF will monitor domestic and global developments and take necessary action to maintain price stability and safeguard foreign reserves.
Rate evolution
From June 2025 to October 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 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. On 29 October, it held the rate to support activity and preserve adequate reserves while managing inflation driven mainly by import costs, noting that headline inflation eased to 6.8% in September but was expected to remain above 6.0% at year-end, growth was expected to exceed the 1.5% forecast with support from tourism, consumption, investment and construction, and reserves stood at around FJD 4.0 billion as of 28 October, covering 5.6 months of retained imports.