Decline in currency is expected of resource-dependent economies: Bank


THE World Bank says currency depreciation is expected for resource dependent economies such as Papua New Guinea with the drop in global commodity prices.
The World Bank was responding to questions from The National on the decline of the Kina’s value against other foreign currencies.
“The depreciation of the Kina is due to the decline in commodity prices,” a spokesman said.
“This is not uncommon for resource dependent economies like PNG, which have seen their respective currencies depreciate against the United States dollar due to the decline in commodity prices.”
The spokesman noted that the agriculture sector had “unrealised potential” as a means of diversifying the economy to counter the decline in the Kina value.
“Agriculture is a likely source of unrealised potential in Papua New Guinea.
“The Government of PNG is partnering with the World Bank to enhance productivity for smallholder coffee and cocoa producers through the Productive Partnerships in Agriculture Project – supporting the productivity improvement in the cocoa and coffee sectors.”
“The government’s decision to take out loans to address the shortage in foreign exchange is common for countries.
“Taking out loans is a common form of government financing around the world.
“The World Bank’s view is that all countries should ensure that public debt is sustainable.”

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