Overseas Exchange Transactions for March 2019

Lower payments of imports and services over the month


Overseas Exchange Transactions
Net Change to Foreign Reserves (TOP$ millions)

  Month Ended Year Ended
  Apr 119
Mar 19
Feb 19
Jan 19
Apr 19
Apr 18


Overall balance
-0.8 -8.5 -5.5 0.4 18.3 74.2
Net Current Account
-0.8 -11.3 -12.6 -9.7 -4.6 20.7
Net Capital Account
2.7 2.2 1.3 8.8 34.4 43.3
Net Financial Account -2.7 0.6 5.8 1.4 -11.5 10.2
Foreign Reserves Levels 464.2 465.0 473.5 478.9 464.2 445.9

Sources: Banking system | National Reserve Bank of Tonga

Overall Balance & Foreign Reserve

In April 2019, payments from the current account for imported goods and services declined by $8.4 million over the month mostly on import and services payments. The total receipts rose by $3.6 million due to higher receipts for services, funds and donations to non-profit organizations and receipts for both official and individual construction. These movements attributed to the improvement in the overall balance which recorded a much lower deficit over  the month compared to March 2019. Despite the favourable monthly movement, the surplus inthe overall balance decreased to $18.3 million over the year and was attributed mainly to higher imports and services payments and interbank transfers. Lower receipts for capital investments such as construction projects also declined over the year.

The official foreign reserves slightly declined to $464.2 million over the month equivalent to 7.8 months of import cover. However, the official foreign reserves increased over the year by $18.3 million as a result of higher receipts for budget support, grants and cyclone relief funds from development partners.

Hence, the Reserve Bank continues to expect the level of foreign reserves will remain at comfortable levels and above 3 months of imports cover in the upcoming months. However, delays to the inflow of aid and budget support from development partners, and expected transfer of offshore investments pose a risk to the foreign reserves outlook. Global uncertainties in oil and commodities prices are also risks to the expectations above.

Current Account

Payments from the current account significantly dropped over the month by $8.4 million coupled with a $2.1 million increase in total current account receipts, has resulted in the improvement in the current account balance to a much lower deficit over the month. Lower payments were noted for imported goods and services, and income payments. Higher receipts were for services, transfers to non-profit organizations, and income receipts.

The merchandise trade deficit contracted over the month by $3.3 million due to less payments for wholesale & retail goods which declined by $5.0 million outweighing a $2.5 million increase in oil import payments. Export receipts continued to remain constant at $1.2 million, noting a slight rise in marine and other export offsetting a $0.1 million decline in agricultural exports.

Services account surplus rose by $5.5 million over the month as payments from the services account declined whilst the receipts increased. Lower payments were noted for airfares, travel allowances, freight, telecommunication and manufacturing services amongst other services. Contrastingly, services receipts rose by $1.5 million mainly for postal and courier services.

Additionally, the surplus in the income account rose by $1.5 million as income payments dropped by $1.2 million over the month from interest payments on government loans in the previous month, whilst the income receipt increased by $0.3 million. The slight rise was mostly for compensation of employees which includes other wages & salaries, and earnings paid under the Recognized Seasonal Employee and Seasonal Workers Programme schemes.

The surplus in the transfers account slightly increased by $0.3 million over the month mainly driven by a $1.4 million rise in receipts by non-profit organizations mostly donations for churches and schools. This was partly offset by a $1.1 million decline in official transfer receipts for the purposes of government budget support and funded projects from development partners. Private transfers, mainly for family support remain unchanged at $24.1 million over the month.

Over the year to April 2019, the current account balance recorded a $4.6 million deficit compared to a surplus in the previous year. More specifically, the merchandise trade deficit and higher services payments outweighed the rise in income and transfers receipts. Import payments increased by $39.4 million due to higher payments for all categories of imports such as wholesale & retail, government imports, motor vehicles, oil and construction materials. Higher service payments were for travel related expenses (airfares & travel allowances), freight, maintenance & repair, professional services and insurance premium pay-outs.

Net income recorded a surplus of $8.2 million compared to a deficit recorded in the previous year. This was attributed to higher income receipts over the year whilst income payments declined. The higher receipts were for other wages & salaries, pension funds and other social benefits. Additionally, receipts for compensation of employees also increased by $4.4 million underpinned by wages paid under the RSE/SWP schemes. The transfers account surplus was higher by $15.6 million due to a $15.7 million rise in transfer receipts which outweighed a slight $0.1 rise in transfer payments. Official transfer receipts increased by $7.7 million particularly for government projects, aid, and budget support funds. Private transfer receipts rose by $5.9 million due to higher remittances for family support from abroad. Receipts by non-profit organizations also contributed to the yearly surplus, rising by $2.2 million.

Capital Account

Higher receipts in the capital account drove the increase in the total capital account surplus to $2.7 million, over the month. Both official and private capital receipts rose by $0.7 million and $0.3 million respectively. These receipts are mainly for investment projects and capital expenditures by the government and receipts by private households for construction purposes. Private capital transfer payments recorded a $0.5 million increase due to the repatriation of unspent project funds.

However, the capital account surplus fell over the year by $8.9 million mainly due to lower private capital receipts. Private receipts and grants for investment and capital expenditures declined by $10.8 million. The official capital transfer receipts slightly declined by $0.3 million. Despite on-going project works funded by multi-national donors, the decline over the year could reflect the implementation of the projects.

Financial Account

The surplus in the financial account continued to fall over the month, to record a $2.7 million deficit compared to a $0.6 million surplus last month. This is a result of higher interbank payments by commercial banks to settle foreign exchange deals for their underlying customers. Consequently, the financial account recorded an $11.5 million deficit over the year compared to a surplus in the previous year. The principal repayment of Government loan to EXIM Bank of China and higher inter-bank payments contributed to the yearly deficit.


Overseas Exchange Transactions Releases

Overseas Exchange Transactions Releases for 2019


pdfIcon March
Released on 3 July 2019 | 155 KB
pdfIcon April
Released on 29 July 2019 | 247 KB

pdfIcon January
Released on 18 June 2019 | 152 KB
pdfIcon February
Released on 21 June 2019 | 158 KB

2018


pdfIcon November
Released on 5 April 2019 | 144 KB
pdfIcon December
Released on 1 May 2019 | 143 KB

pdfIcon September
Released on 25 February 2019 | 143 KB
pdfIcon October
Released on 25 February 2019 | 143 KB

pdfIcon July
Released on 23 November 2018 | 150 KB
pdfIcon August
Released on 27 December 2018 | 154 KB  

pdfIcon May
Released on 15 August 2018 | 337 KB
pdfIcon June
Released on 4 October 2018 | 148 KB 

pdfIcon March
Released on 7 June 2018 | 174 KB
pdfIcon April
Released on 15 August 2018 | 333 KB

pdfIcon January
Released on 16 May 2018 | 179 KB
pdfIcon February
Released on 29 May 2018 | 174 KB 

2017


pdfIcon December
Released on 19 March 2018 | 300 KB
pdfIcon November
Released on 2 February 2018 | 285 KB

pdfIcon October
Released on 25 January 2018 | 272 KB
pdfIcon September
Released on 27 December 2017 | 476 KB

pdfIcon August
Released on 27 November 2017 | 458 KB
pdfIcon July
Released on 16 October 2017 | 264 KB

pdfIcon June
Released on 16 October 2017 | 259 KB
pdfIcon May
Released on 15 August 2017 | 262 KB

pdfIcon April
Released on 10 July 2017 | 268 KB
pdfIcon March
Released on 28 June 2017 | 270 KB

pdfIcon February
Released on 28 June 2017 | 367 KB
pdfIcon January
Released on 21 June 2017 | 307 KB

2016


pdfIcon December
Released on 21 June 2017 | 314 KB
pdfIcon November
Released on 21 June 2017 | 303 KB

pdfIcon October
Released on 3 April 2017| 479 KB
pdfIcon September
Released on 28 March 2017| 493 KB

pdfIcon August
Released on 14 February 2017| 492 KB
pdfIcon July
Released on 9 November 2016 | 467 KB

pdfIcon June
Released on 5 September 2016 | 630 KB
pdfIcon May
Released on 10 August 2016 | 615 KB

pdfIcon April
Released on 30 June 2016 | 617 KB
pdfIcon March
Released on 7 June 2016 | 613 KB

pdfIcon February
Released on 17 May 2016 | 634 KB
pdfIcon January
Released on 10 May 2016 | 621 KB

2015


pdfIcon December
Released on 22 April 2016 | 670 KB
pdfIcon November
Released on 22 April 2016 | 658 KB

pdfIcon October
Released on 29 January 2016 | 494 KB
pdfIcon September
Released on 27 January 2016 | 518 KB

pdfIcon August
Released on 8 January 2016 | 288 KB
pdfIcon July
Released on 22 December 2015 | 312 KB

pdfIcon June
Released on 9 December 2015 | 554 KB
pdfIcon May
Released on 6 October 2015 | 630 KB

pdfIcon April
Released on 15 July 2015 | 653 KB
pdfIcon March
Released on 3 June 2015 | 672 KB

pdfIcon February
Released on 10 April 2015 | 385 KB
pdfIcon January
Released on 3 June 2015 | 741 KB

2014


pdfIcon December
Released on 16 February 2015 | 471 KB
pdfIcon November
Released on 16 February 2015 | 441 KB

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