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Remittances boost Tonga’s foreign reserves


Radio & TV Tonga, Nuku’alofa, 12/10/2017


The Reserve Bank’s expectation for strong economic activity remains in the near term.


The level of foreign reserves is also projected to remain adequate supported by estimated higher receipts of remittances and foreign aid and this will be partially offset by the expected increase in imports.


Upward inflationary pressure remains in the near term due mainly to the impact of the new customs duty and excise tax effective in July 2016 and 2017, although it is expected to fall below the Reserve Bank’s inflation reference rate of 5% per annum in August 2017.


However, adverse weather conditions and higher import prices poses a risk to these favorable projections.


The Governor of the National Reserve Bank will continue to closely monitor developments in the domestic and global economy and update its monetary policy setting, to maintain internal and external monetary stability, and 2 – to promote a sound and efficient financial system in order to support macro-economic stability and economic growth.


The Reserve Bank will also remain vigilant and continues to closely monitor developments for early signs of vulnerabilities which may indicate overheating of the economy.


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