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Foreign Reserves increase in February in the aftermath of TC Gita

Radio & TV Tonga, Nuku’alofa, 13/04/2018

The Foreign Reserves increased to 448 million pa’anga in February driven by higher receipts of Government grants and cyclone relief funds from development partners and insurance payouts. It is equivalent to 8.1 months of import cover which is still above the minimum range of 3-4 months.

The National Reserve Bank of Tonga Governor Dr Ngongo Kioa reports that the domestic economic activities in February were affected due to the devastation by TC Gita.

The growth outlook for Tonga remains positive in the years ahead as projected in August 2017.

Growth for 2017/2018 will be reduced due to the impact of TC Gita but anticipated to be higher in 2018/2019.

The level of foreign reserves is expected to remain comfortable well above the minimum range supported by expected higher receipts of remittances and foreign aid.

This will partially offset by the projected rise on imports and the commencement of the Government’s principal loan repayment to China.

The adverse weather conditions and higher import prices pose a risk to these projections.

The Reserve Bank remains vigilant to closely monitor developments for early signs of vulnerabilities which may indicate overheating of the economy.

© Radio and Television Tonga News