Overseas Exchange Transactions for December 2018

Lower OET surplus recorded for December following a high month


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

  Month Ended Year Ended
  Dec 18
Nov 18
Oct 18
Sep 18
Dec 18
Dec 17


Overall balance
9.8 11.4 5.1 -22.8 56.0 43.7
Net Current Account
6.7 21.2 0.5 -16.9 28.2 12.2
Net Capital Account
1.9 1.0 1.3 2.9 27.9 43.7
Net Financial Account 1.2 -10.9 3.3 -8.8 -0.1 -12.3
Foreign Reserves Levels 478.5 468.7 457.3 452.2 478.5 422.5

Sources: Banking system | National Reserve Bank of Tonga

Overall Balance & Foreign Reserve

The balance of the overall OET surplus fell by $1.5 million in December to $9.8 million. Despite recording a lower surplus than last month, there were higher income, private transfer, and travel receipts which assisted in partially offsetting the overall decline. This further contributed to an increase in the official foreign reserves to $478.5 million in December, equivalent to 8.2 months of import cover. Annually, the overall OET surplus balance increased by $12.4 million to $56.0 million. This was attributed mainly to higher transfer and income receipts as well as other investment receipts coinciding also with the yearly rise in the official foreign reserves level.

In future, the Reserve Bank continues to expect that the level of foreign reserves will remain at comfortable levels and above the 3 months of import cover. This is projected to be supported by higher receipts of remittances and foreign aid. However, possible 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. Global uncertainties regarding oil and commodities prices coupled with Tonga’s vulnerability to natural disasters are also risks to the expectations above.

Current Account

The current account balance was lower than last month yet remained positive. This resulted mainly from lower transfers particularly official receipts. More specifically, official receipts declined by $18.2 million in December and resulted mainly from lower government receipts for the purposes of budget support and funded projects from development partners. This followed the high inflow of official transfer receipts last month. However, import payments declined which stemmed largely from lower payments for oil and construction imports offsetting the higher payments for wholesale and retail imports. Furthermore, service payments increased in December due to an increase in payments for airfares. This could explain the significant increase in total international air arrivals and departures indicating families that are travelling for the festive season. On the other hand, the income balance recorded a higher surplus in December than that of last month. This was driven by a rise in receipts of compensation of employees and pension funds whilst payments increased slightly due to higher payments made out for the same purpose (compensation of employees).

Annually, the current account balance rose by $16.0 million to $28.2 million. This was due largely to an increase of $40.7 million for receipts of official transfers and particularly for government projects, aid, and budget support funds. Additionally, private transfer receipts contributed to the yearly surplus and rose by $12.4 million due to higher remittances for family support from abroad. Meanwhile, these increases managed to offset the widening deficit in the merchandise account as it continued to record a rise of $44.8 million. The higher payments were for imported wholesale & retail goods, oil, other imports, and vehicles. This coincided also with an increase of 898 container registrations indicating a busy trade sector. The trade deficit corresponds to a decline in proceeds from all export categories except agriculture and other marine exports which increased. Meanwhile, the service account surplus declined due to an increase in service payments particularly for air freight services, personal travel, and professional, management, and other business services.

Capital Account

The surplus in the capital account increased to a balance of $1.9 million in December. This was due mainly to a $1.1 million rise in official capital receipts. Meanwhile, official capital account payments recorded no transactions over the month. The increase in the official capital account receipts resulted from higher official grants for investment projects, capital expenditures, and for construction purposes and had offset the slight decline in private capital account receipts.

In year ended terms, despite recording a surplus, the capital account balance decreased by $15.9 million to $27.9 million. The decline in private receipts and grants of $15.8 million for investment projects and capital expenditures drove the yearly fall. The official capital transfer receipts also recorded a slight decline of $0.5 million. Despite on-going project works funded by multi-national donors, the decline over the year could reflect a delay in aid and other budget support receipts.

Financial Account

The financial account balance increased in December and recorded a surplus. This stemmed largely from other investments particularly interbank receipts. However, financial account payments declined over the month also which contributed to the monthly surplus. Over the year, the financial account noted a deficit though much improved from last year. This was driven mainly by other investments particularly higher interbank receipts. Despite this increase and improvement, it was insufficient to offset the yearly movement in interbank payments.


Overseas Exchange Transactions Releases

Overseas Exchange Transactions Releases for 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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