Overseas Exchange Transactions for February 2019

Lower capital account surplus following a hike in January


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

  Month Ended Year Ended
  Feb 19
Jan 19
Dec 18
Nov 18
Feb 19
Feb 18


Overall balance
-5.5 0.4 9.8 11.4 25.5 70.3
Net Current Account
-12.6 -9.7 6.7 21.2 -9.6 26.3
Net Capital Account
1.3 8.8 1.9 1.0 33.4 43.9
Net Financial Account 5.8 1.4 1.2 -10.9 1.7 0.1
Foreign Reserves Levels 473.5 478.9 478.5 424.8 473.5 448.0

Sources: Banking system | National Reserve Bank of Tonga

Overall Balance & Foreign Reserve

Fewer receipts in the capital account in February 2019 compared to the previous month coupled with higher deficit in the current account widened, drove the overall balance to record a $5.5 million deficit following the surplus recorded last month.

Consequently, the official foreign reserves fell to $473.5 million over the month equivalent to 8.0 months of import cover. Annually, the surplus in the overall balance lowered by $25.5 million and was attributed mainly to higher imports and services payments. As such, the official foreign reserves increased over the year by $25.5 million. The annual growth resulted from higher receipts of budget support, grants and cyclone relief funds from development partners.

The Reserve Bank anticipates the level of foreign reserves to remain at comfortable levels and above the 3 months minimum range of import cover for the remainder of 2019. However, any delays to the inflow of aid and budget support from development partners, combined with the pace of development in the domestic economic activities, may pose a risk to the foreign reserves outlook. Uncertainties in the global oil and commodities prices and Tonga’s vulnerability to natural disasters are also risks to the forecast.

Current Account

Receipts in the current account declined coupled with an increase in payments, led to a widening of the current account deficit over the month. These were mainly higher payments for imported goods which outweighed the rise in the transfers account. The merchandise trade deficit widened due to higher payments by $1.7 million for wholesale & retail goods and government imports. On the other hand, export receipts declined by $0.3 million over the month due to lower receipts from the agricultural sector. Although both payments and receipts to the services accounts declined in February, the higher payments compared to receipts led to a deficit in the account compared to a surplus in the previous month. Movements in the income account were similar to that of January with both payments and receipts remaining at the same amount and the net surplus remained at $1.5 million. The surplus on the transfers account increased by $2.5 million over the month due to higher receipts coupled with lower payments. More specifically, official receipts rose by $1.6 million mainly for the purposes of government budget support and funded projects from development partners. Receipts for donations and projects to non-profit organizations also increased by $1.0 million. However, lower private transfers resulted from lower remittances for family support over the month.

In year ended terms, the current account balance recorded a $9.6 million deficit compared to a surplus in the previous year. More specifically, the merchandise trade deficit and higher services payments have outweighed the rise in income and transfers receipts. Import payments increased by $38.0 million due to higher payments for wholesale & retail, oil, government imports and motor vehicles. Higher service payments were noted for freight, travel related, professional services and maintenance & repair. Net income rose to a $7.7 million surplus compared to a deficit recorded in the previous year. This was attributed to higher income receipts over the year whilst income payments declined. Additionally, receipts for compensation of employees also increased by $5.2 million which includes wages paid under the Recognized Seasonal Employee and other jobs. The transfers account was higher by $17.0 million due to higher transfer receipts which was greater than the rise in transfer payments. Private transfer receipts rose by $9.2 million due to higher remittances for family support from abroad. Official transfer receipts increased by $8.7 million particularly for government projects, aid, and budget support funds. Receipts by non-profit organizations also contributed to the yearly surplus and rose by $5.3 million.

Capital Account

The surplus in the capital account fell by $7.5 million over the month following the significant rise in capital account receipts in January 2019 which was for construction project in the agricultural sector. This was driven solely by the $7.9 million decline in the surplus of the private capital account offsetting the $0.4 million increase in the surplus from the official capital account. These receipts are mainly for investment projects and capital expenditures. Both official capital and private capital transfer accounts recorded no payments during the month.

Additionally, the capital account surplus also lowered over the year by $10.5 million due to lower receipts from both private and official capital receipts. Private receipts and grants for investment projects and capital expenditures declined by $10.8 million driving the yearly fall. The official capital transfer receipts also recorded a $2.0 million fall. Despite on-going project works funded by multi-national donors, the decline over the year could reflect a delay in the implementation of the projects and other budget support receipts.

Financial Account

The surplus in the financial account increased over the month as a result of higher transfers by foreign commercial banks to their accounts in Tonga for payments to customers. Over the year, the financial account surplus rose by $1.6 million due to higher inter-bank payments which was sufficiently covered by interbank receipts. This was also supported by the lower deficit in the direct investment accounts as fewer payments for dividends and capital were recorded over the year.


Overseas Exchange Transactions Releases

Overseas Exchange Transactions Releases for 2019


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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