Foreign currency exchange operations by unauthorized dealers has become a major concern for the National Reserve Bank of Tonga (NRBT), who want to shut down the involvement of retail shops in Tonga offering the services illegally to their customers.

On 9 January, the Reserve Bank appealed to the public to report to the bank any person or business that is providing foreign exchange services illegally.

The NRBT has the authority to conduct foreign exchange services in the country.

At the moment Foreign Exchange Services are legally available are through Authorised Dealers, Restricted Licensed Dealers and Registered Dealers.

The Financial Institutions Department of the NRBT, stated that Authorised Dealers, who can transfer foreign currencies in and out of the country, are the banks:

• Australia and New Zealand Banking Group Ltd.
• MBF Tonga Ltd.
• BSP Tonga Ltd.
• Tonga Development Bank. 

The Authorised Restricted Licensed Dealers who can also transfer foreign currencies in and out of the country are:

• MoneyGram,
• Western Union,
• IMEX and RIA Money Transfer, 
• T &T Money Transfer Ltd.
• KlickEx Trading Ltd. 

The Registered Dealers, may only exchange Tongan pa’anga with foreign currency and transfer it out of the country. The Registered Dealers are:

• SAV Money Transfer,
• Jones Travel Ltd,
• Digicel Mobile Money,
• Frank Money Transfer
• Tonga Post Ltd,
• ‘Ofa Ltd.
• Fietokoni Financia Services Ltd.
• Island Flexi Transfer.

This month the NRBT terminated license of one of the Authorsed Restricted Registered Dealer, Tonga Ma’ae Tonga Group Ltd because they failed in their regular Compliance Check.

Interestingly, according to the NRBT, Tonga's Foreign Reserves fell by $2.3 million over the month of December 2017 to $422.5 million, or equivalent to 7.5 months of import.