Press Release No. : 01/2026
Date : 29 January 2026
Press Release No 01 – RBF Maintains Monetary Policy Stance
The Reserve Bank of Fiji (RBF) Board maintained the Overnight Policy Rate at 0.25 percent at its meeting on 29 January. The Governor and Chairman of the Board, Mr Ariff Ali, reaffirmed that the RBF’s dual monetary policy objectives of maintaining price stability and ensuring adequate levels of foreign reserves remain intact.
The year-end inflation for 2025 as released by the Fiji Bureau of Statistics, stood at 0.0 percent. The outcome was largely driven by lower fuel and gas prices which offset the higher prices noted in the alcoholic beverages, tobacco & narcotics category, while food & non-alcoholic beverage prices were unchanged. The inflation outlook for 2026 is projected at around 2.5 percent barring any external shocks or notable rise in tariffs such as the proposed electricity tariff increase which could exert upward pressure on prices through both direct price effects and broader cost pass-through channels. Foreign reserves remain comfortable at $3.7 billion (29/01) sufficient to cover 5.4 months of retained imports of goods and services and are expected to remain adequate over the medium term.
Domestically, tourism activity performed better than expected in 2025, with visitor arrivals increasing marginally by 0.3 percent to 986,367 against a forecast of no growth. However, the increase was notably lower than the 5.7 percent growth in visitor arrivals recorded in 2024. The out turn in 2025 was supported by higher arrivals from the United States, Continental Europe, Pacific Island Countries and the United Kingdom while visitors from key markets New Zealand and Australia ended the year with subdued outcomes.
Sectoral performances were mixed with mahogany and electricity noting higher output, while pinewood commodities, mineral water, gold ore, and sugar production fell. Indicators of consumption showed strong activity throughout 2025, driven by higher incomes, remittance inflows, and increased new commercial bank consumption-related lending amid the lower VAT rate. This momentum is expected to continue in the months ahead, supported by continued expansion in lending and higher Government spending including the recent back-to-school assistance. Investment activity gradually improved, reflected in the pickup in both private and public construction-related projects, alongside some softening in previously elevated building material prices. Forward looking indicators such as building permits issued and new investment lending point to a more positive investment outlook, although the upcoming national elections may prompt a temporary wait-and-see behaviour among investors. The Chairman added that the financial sector continued to support economic activity with ample liquidity in the banking system of $2.0 billion (28/01) allowing interest rates to remain low and aiding the growth of private sector credit (8.4%) in 2025.
The Fijian economy is projected to expand for a fifth consecutive year in 2026, with growth forecast at 3.0 percent supported by a 2.0 percent increase in visitor arrivals. However, the Governor cautioned that rising external and domestic risks could weigh on the outlook. These include the heightened geopolitical and trade tensions globally, national elections in Fiji and in major trading partner economies, subdued demand from key tourism markets and the possibility of a domestic electricity tariff increase. The RBF will continue to closely monitor global and domestic developments and its implications on the current outlook and align monetary policy accordingly.
RESERVE BANK OF FIJI
For further details, please contact:
Communications Office
Telephone: (679) 3223 381 Email: info@rbf.gov.fj
Mervin Singh – Manager Corporate Communications
Telephone: (679) 3223 229 Email: mervin@rbf.gov.fj