Press Release No. : 23/2026
Date : 27 August 2026
Press Release No 23 – RBF Maintains the Overnight Policy Rate
The Reserve Bank of Fiji (RBF) Board agreed to maintain the Overnight Policy Rate at 0.25 percent at its meeting on 27 August.
The Governor and Board Chairman, Mr Ariff Ali, stated that the decision reflects the need to continue supporting economic activity while maintaining adequate foreign reserves amid ongoing supply-driven inflationary pressures.
Headline inflation was recorded at 5.7 percent in July, slightly lower than the 6.1 percent registered in June, but well above the -1.5 percent recorded a year earlier. The annual increase was driven primarily by higher fuel, gas and kerosene prices, which collectively contributed around 2.8 percentage points (ppts) to July inflation. Inflation is expected to remain elevated in the coming months due to ongoing higher global fuel prices and freight costs which will continue to pass through to domestic prices.
Foreign reserves stood at $3.9 billion (as of 27 August) sufficient to cover 5.5 months of retained imports and are expected to remain adequate over the medium term. The current level of reserves is held up by government external loan drawdown, strong tourism receipts and remittance inflows.
Economic activity remains encouraging. Visitor arrivals continued to surpass expectations, reaching 105,791 in July, the highest level ever recorded for the month. This represents a 6.5 percent increase over July 2025 and raising cumulative visitor arrivals growth to 4.3 percent in the seven months of the year.
Strong tourism activity and higher remittances inflows which increased by 26.3 percent in the first six months of 2026 have supported household consumption. Investment activity has also remained resilient, underpinned by higher lending and construction activity. Against this backdrop, the outlook for economic growth in 2026 remains positive, with recent indicators suggesting some potential for growth to be stronger than currently anticipated.
Financial conditions also remain supportive of economic activity. Banking system liquidity was ample at around $2.0 billion as of 26 August, helping to keep lending rates low and supporting robust private sector credit growth of 14.6 percent in July.
The Governor concluded that inflationary pressures, election related uncertainty, social and security concerns and ongoing geopolitical tensions, together with associated energy market volatility pose risks to Fiji’s macroeconomic fundamentals through their potential impact on investment, inflation, and foreign reserves.
The RBF will continue to monitor developments closely and adjust policy as needed to maintain price stability and safeguard foreign reserves.
RESERVE BANK OF FIJI
For further details, please contact: –
Communications Office
Telephone: (679) 3223 381 Email: info@rbf.gov.fj
Mr Mervin Singh – Manager Corporate Communications
Telephone: (679) 3223 229 Email: mervin@rbf.gov.fj