Reserve Bank of Fiji Governor, Ariff Ali says the year-end inflation forecast for 2022 has been revised up to 4.5 percent due to high imported inflation amidst rising global commodity prices, supply chain disruptions, the pick-up in foreign demand and the recent domestic floods.
Ali says annual inflation was 2.7 percent in January 2022 largely led by these factors.
He further says as global demand and supply mismatches normalise and commodity prices stabilise, inflationary pressures are expected to subside.
Ali says the year-end inflation is forecast to moderate to 3.0 percent and 2.6 percent in 2023 and 2024, respectively.
He also says the monetary policy objectives of the Bank remain intact for the near to medium term despite concerns around inflation.
Foreign reserves currently stand at $3.085 billion, sufficient to cover 8.5 months of retained imports of goods and services.
The RBF Governor says the rebound in tourism activity and Government external loan drawdowns are anticipated to keep foreign reserves at adequate levels into the medium term.
He says the Bank will remain vigilant in its macroeconomic assessments given the evolving global and domestic conditions and emerging risks, aligning monetary policy, as and when required.
The Reserve Bank of Fiji Board has kept the Overnight Policy Rate unchanged at 0.25 percent following its monthly meeting today.
