The Reserve Bank of Fiji kept its benchmark interest rate on hold at a record low of 0.5 percent at its November 2018 meeting amid a comfortable outlook for sectoral performance, inflation, foreign reserves, and current economic conditions. Policymakers said that economic activity continues to be supported by robust outcomes from visitor arrival, electricity generation, and timber production. Also, an increase in private consumption, as noted in several indicators for consumption and investment such as net VAT collections, vehicle registrations and new commercial bank lending. Inflation is expected to subside to 3.5 percent in 2019 and 3 percent in 2020. Meanwhile, foreign reserves are projected to remain at comfortable levels. As of 29 November foreign reserves stood at USD 2,068.6 million equivalent to 4.6 months of retained imports of goods and non-factor services. The Bank will continue to monitor international and domestic development and align monetary policy accordingly. Interest Rate in Fiji averaged 0.52 percent from 2010 until 2018, reaching an all time high of 2.50 percent in December of 2010 and a record low of 0.50 percent in January of 2011.
Interest Rate in Fiji is expected to be 0.50 percent by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate Interest Rate in Fiji to stand at 1.00 in 12 months time. In the long-term, the Fiji Interest Rate is projected to trend around 1.50 percent in 2020, according to our econometric models.