The Reserve Bank of Fiji has left its Overnight Policy Rate unchanged, signalling confidence in the country’s economic recovery while acknowledging that inflationary pressures are expected to remain elevated through the remainder of the year.
Announcing its latest monetary policy decision, the Reserve Bank said maintaining the existing policy setting would provide continuity as the economy continues to expand following the strong rebound in tourism and domestic activity. The central bank expects inflation to remain around six per cent by the end of 2026, reflecting higher imported costs, domestic demand and external economic conditions.
The Bank said Fiji’s economy continues to benefit from solid tourism performance, increased business activity and ongoing public and private sector investment. Visitor arrivals have remained robust, supporting employment and spending across accommodation, transport, retail and hospitality industries.
At the same time, policymakers remain alert to global uncertainties, including volatile commodity prices, geopolitical tensions and slower growth among major trading partners, all of which have the potential to affect Fiji’s small, open economy.
The decision to leave the policy rate unchanged suggests the Reserve Bank believes current monetary settings remain appropriate to support growth while containing inflation expectations. Central banks typically adjust policy rates to influence borrowing costs, investment and consumer spending. A higher rate can help slow inflation, while a lower rate encourages lending and economic activity.
Business groups welcomed the stability provided by the latest decision, noting that predictable monetary policy assists companies making investment decisions. However, they also acknowledged that financing costs remain higher than before the pandemic, particularly for businesses undertaking expansion projects.
The Reserve Bank said it would continue monitoring domestic and international economic developments closely and stood ready to adjust policy if conditions changed significantly.
Economists expect monetary policy to remain cautious over coming months as authorities seek to balance inflation control with sustaining economic growth. Much will depend on global fuel prices, international supply chains and the continued strength of Fiji’s tourism industry, which remains the country’s principal source of foreign exchange earnings.
