The Reserve Bank of Fiji (RBF) maintained its Overnight Policy Rate at 0.25% to support economic activity and preserve adequate foreign reserves while managing inflation pressures driven mainly by higher import costs. Economic growth in 2026 is expected to exceed the bank’s 1.5% forecast, supported by stronger tourism, consumption, investment and construction activity. Visitor arrivals rose 3.7% in the year to September compared with the same period in 2025. Annual headline inflation eased to 6.8% in September from 7.6% in August, with price pressures concentrated in food, fuel, kava and utilities. Inflation is expected to remain above 6.0% at the end of 2026 because of persistently high global commodity prices and El Niño weather conditions, which are likely to raise domestic food prices. El Niño also poses downside risks to economic growth in 2027. Foreign reserves stood at around FJD 4.0 billion as of Oct. 28, sufficient to cover 5.6 months of retained imports, and are expected to remain adequate over the medium term. Government external financing and tourism receipts underpin reserve levels. Financial system liquidity of around FJD 2.1 billion supported low interest rates and strong private sector credit growth, largely to businesses and households.
Reserve Bank of Fiji holds policy rate at 0.25% as inflation remains elevated
The Reserve Bank of Fiji kept its Overnight Policy Rate at 0.25%, balancing support for economic activity and foreign reserves against inflation pressures from higher import costs. Growth in 2026 is expected to surpass the 1.5% forecast, while inflation is projected to remain above 6.0% at the end of the year amid high commodity prices and El Niño effects. Foreign reserves of around FJD 4.0 billion covered 5.6 months of retained imports.