Tonga’s banking system will continue to remain strong, according to the National Reserve Bank.
The Governor of the Reserve Bank, Sione Ngongo Kioa, said foreign reserves were projected to remain at a comfortable level and inflation was likely to remain below five percent.
Kioa said the banking system remained sound as banks continued to maintain a strong capital position supported by adequate profits.
Tonga’s economic performance remained positive in the medium term, but uncertainty about weather posed a risk.
Despite the largely positive outlook, there were some negative indicators in February.
While the volume of agricultural exports rose by 31.3 tonnes on the back of higher shipment of cassava and yam, the level of export proceeds for the month fell.
A slow down in construction activity slowed in February was reflected in fewer loans being extended to the construction sector while housing loans rose slightly.
Remittances dropped again in February due to lower private transfers for family support from abroad.
Container registrations declined, mainly due to a fall in the number of private containers.
Travel receipts fell in line with and decline in international air arrivals.
Meanwhile, electricity consumption increased in February, coinciding with a rise in the number of electricity consumers.
Foreign reserves declined in February 2019 by TP$5.5 million to TP$473.5 million, equivalent to 7.9 months of imports cover.
This was a result of higher import payments made over the month.
At its April meeting Reserve Bank of Tonga’s Board of Directors agreed to maintain the monetary policy rate at 0%; to keep the minimum loans/deposit ratio of 80%; maintain the Statutory Reserve Deposit ratio at 10%, and maintain the inflation reference rate at 5%.
The main points
- Tonga’s banking system will continue to remain strong, according to the National Reserve Bank.
- The Governor of the Reserve Bank, Sione Ngongo Kioa, said foreign reserves were projected to remain at a comfortable level and inflation was likely to remain below five percent.