Press Release No. : 14/2026
Date : 25 June 2026
Press Release No 14 – RBF Maintains the Overnight Policy Rate
The Reserve Bank of Fiji (RBF) Board has decided to keep the Overnight Policy Rate unchanged at 0.25 percent.
The Governor and Chairman of the Board, Mr Ariff Ali, emphasised that monetary policy must balance between rising domestic prices, maintaining adequate foreign reserves, and supporting overall economic activity.
On inflation, Mr Ali stated that domestic prices are expected to be elevated in the near term, even though global oil prices have eased (to US$74 per barrel as of 23 June, from US$92 per barrel at the end of May) following reports of a tentative and time-bound agreement between Iran and the US. This reflects the delayed impact of earlier increases in fuel and input costs, the time it takes for global oil supply to stabilise, and the gradual adjustment of domestic fuel prices, which are based on earlier higher import costs.
The latest data from the Fiji Bureau of Statistics show that the price of a representative1 basket of goods and services (i.e. headline Consumer Price Index) was 3.9 percent higher than a year earlier, largely driven by higher prices for fuel, food and kava. Looking ahead, how much future prices rise will depend on whether the Iran-US peace agreement holds, whether current geopolitical tensions ease, and how long it takes for global oil markets to return to normal levels of production. As such, the forecast remains that inflation will reach about 6.0 percent by the end of the year.
Economic activity, measured by the value of goods and services that are being bought and produced within Fiji, continues to be supported by tourism activity. However, higher global fuel prices have dampened travel demand and overall economic activity, contributing to a downward revision in Fiji’s growth forecast for 2026 to 1.5 percent, from the previous projection of 3.0 percent.
At the same time, foreign reserves stand at around $3.4 billion (as of 25 June), sufficient to cover 4.7 months of retained imports and are expected to remain adequate in the near to medium term, supported in part by Government loan drawdowns from international partners. Maintaining adequate foreign reserves is essential for Fiji, as they ensure the country can continue to purchase critical imports and helps support stability in the value of the Fijian dollar.
Despite the challenging economic environment, the Governor emphasised that the financial system continues to be supportive of economic activity, with ample liquidity ($1.6 billion as of 24 June) and sustained growth in private sector lending. The financial system is well positioned to withstand temporary global and domestic shocks.
Mr Ali said that, taken together, slowing economic activity and inflation driven by higher prices of imported goods support keeping the overnight policy rate unchanged, avoiding additional pressure on borrowing costs at a time when growth is slowing.
The Reserve Bank continues to closely monitor global and domestic developments, including the national budget that will be announced tomorrow, and will take necessary actions if needed to safeguard macroeconomic stability, consistent with its mandate.
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