Mollyn Nakabea 
[Photo: FILE]
Fiji’s inflation rate has jumped to 7.6 per cent, with the Reserve Bank warning prices are likely to remain high for the rest of the year.
The Reserve Bank of Fiji Board has kept the overnight policy rate at 0.25 per cent.
Governor and Board Chairman Ariff Ali states the decision balances rising inflation with the need to support economic growth.
Inflation rose from 5.7 per cent in July to 7.6 per cent in August.
The increase was mainly driven by higher food, energy and kava prices.
The Reserve Bank says the impact of the VAT reduction introduced last year is also fading.
Ali says inflation is expected to stay above six percent through the end of the year.
He says global commodity prices and the developing El Niño could put further pressure on prices.
Despite this, the Reserve Bank says Fiji’s economy continues to perform in line with expectations.
The economy grew by 2.5 per cent last year, with tourism, consumer spending and construction supporting activity.
Foreign reserves stood at about $3.9 billion as of Wednesday.
The Reserve Bank says this is enough to cover 5.5 months of retained imports.
Ali says the economic outlook has become more challenging, particularly with the expected impact of El Niño on growth next year.
The Reserve Bank says it will continue to monitor the economy and adjust monetary policy if needed.
