13 Mar 2007

Tonga's central bank to loosen liquidity to support reconstruction of capital

7:22 pm on 13 March 2007

The National Reserve Bank of Tonga has announced it will reduce its required reserves ratio towards the end of the month.

The Bank says the liquidity position of the banking system has tightened since the riot and it expects liquidity to remain tight unless external funding is received.

The reduction of ratio will inject additional liquidity to the banking system to assist with the anticipated pick-up in the demand for credit to support reconstruction of Nuku'alofa.