Press Release No. : 11/2025
Date : 31 July 2025
Press Release No 11 – RBF Maintains the Overnight Policy Rate
The Reserve Bank of Fiji (RBF) Board decided to maintain its Overnight Policy Rate (OPR) at 0.25 percent during its monthly meeting on 31 July 2025.
The Governor and Chairman of the Board, Mr Ariff Ali, highlighted that the Bank’s current accommodative monetary policy stance aligns to the twin objectives remaining intact. Notably, annual inflation eased to -0.6 percent in June, from 0.1 percent registered in May and 6.7 percent in June last year. This was mainly driven by lower prices noted for major categories including food and non-alcoholic beverages, transport & housing and utilities. In addition, taxation policies announced in the 2025-2026 National Budget are expected to place downward pressure on consumer prices from August. However, risks to the inflation outlook remain mainly due to geopolitical tensions in the Middle East which could potentially affect global commodity prices and freight costs. Foreign reserves are comfortable, at approximately $3.8 billion (31/07), sufficient to cover 6.0 months of retained imports of goods and services and are projected to remain adequate over the medium term.
On the domestic front, partial indicators for sectoral outcomes and consumption were generally positive. The cane harvesting season started off on a positive note with both cane and sugar production noting positive results in the first six weeks of crushing compared with the same period last year but remains well below historical levels. The resource-based sectors registered better annual performances, particularly for mahogany, sawn timber, woodchip and mineral water production in the first half of the year. While visitor arrivals declined (-0.8%) in the year to June 2025, a recovery in arrivals from New Zealand and higher number of visitors from the United States resulted in a marginal pick-up (0.1%) in June, marking the third consecutive month of increased visitor arrivals when compared to the same period last year. Nonetheless, arrivals from Australia, our main source market continued to fall.
The Governor further stated that positive consumption activity persisted in the review period, evident from the increase in VAT collections, new consumption loans and vehicle registrations. Consumer spending continues to be supported by higher incomes and a steady inflow of remittances. Partial indicators for investment and construction indicate signs of a slow-paced recovery as the high cost of doing business and regulatory bottlenecks continue to affect growth momentum. Indicators also suggest that the labour market conditions are easing as resident departures, the intake of foreign labour and recruitment intentions declined. Going forward, the initiatives announced in the National Budget is expected to provide stimulus for economic activity in the coming months.
The Chairman stated that the financial sector remains conducive for growth with ample liquidity ($2.2 billion as of 30 July) in the banking system and the low interest rates supporting private sector credit.
The Governor however cautioned that persistent uncertainty on the global economic and trade front could affect domestic economic conditions going forward. The Bank will continue to closely monitor international and domestic developments 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
Mr Mervin Singh – Manager Corporate Communications
Telephone: (679) 3223 229 Email: mervin@rbf.gov.fj