BPNG explains drop in kina value

By GEDION TIMOTHY
THE kina has depreciated by almost 36 per cent against the United States dollar since 2012, Bank of PNG Governor Loi Bakani says.
He told the Consultative Implementation and Monitoring Council development forum in Port Moresby that the deprecating kina had both good and negative effects.
“My argument all the time is that it will affect the eight million, nine million, people of Papua New Guinea in terms of price increases,” Bakani said.
He said importers and consumers in those times should make adjustments and sacrifices.
“Those are you know, individual sacrifices that we all need to do to adjust to the current situations,” he said.
“There is some adjustment taking place, some level of private sector going to local production which is good.
“We do not have to buy tinned fish to buy those things at the shops (the things that are imported).
“We should buy things that are in the gardens that are at the market.
“So those are kind of simple things but a lot of our people are doing it. It will make some adjustments, real adjustments in the economy.
“For us (BPNG) in managing the situation is very difficult, we have to maintain the level of reserves, the level of exchange rate that is conducive to everybody to operate efficiently and continue to do their business.
“And off course all the levels of reserves that we have, we have got US$4 billion (K12bn) in 2012, it is now US$1.7 billion (K5bn).
“We have to maintain the level of reserves that is adequate and sufficient to meet government commitments and of course the private sectors.”