Given the recently announced tax increases in the 2023-2024 National Budget, inflation is expected to rise from August onwards and register at 4.7 percent at the end of the year before subsiding to 2.5 percent by the end of 2024.
Reserve Bank of Fiji Governor and Chairman of the RBF Board, Ariff Ali says headline inflation has been on a declining trend and moderated to 0.8 percent in May from the 1.4 percent recorded in April, mostly owing to lower fuel and kava prices.
However inflation will rise based on the tax increases from August. Ali adds that foreign reserves remain comfortable at $3.6 billion, sufficient to cover 6.3 months of retained imports of goods and services and the medium term outlook is above the benchmark of 4.0 months of import cover.
He says the current monetary policy stance will continue as long as the outlook for inflation and foreign reserves are within the comfortable range.
The RBF will continue to closely monitor global and domestic economic developments, and align monetary policy accordingly.
The board has also decided to maintain the Overnight Policy Rate at 0.25 percent.
