Westpac faces K3 million in orders a month


WESTPAC attempts to clear a large foreign exchange order of about $US1 million (K3mil) in one month in the foreign exchange market, according to managing director Adrian Hughes.
Hughes told The National that this was dependent on the level of foreign currency inflows.
He said businesses had to make adjustments in response to the challenging economic climate.
“The pressure resulting from the shortage of foreign currency has been challenging for business and for individuals,” he said.
“Many corporates are downsizing or scaling back their operations in response to the very challenging economic conditions. The backlog is significant and in the hundreds of millions of dollars.
“As a rule of thumb, we try to clear a large order for a single customer of US $1 million (K3.2 million) in one month. But of course this depends on currency inflows which are hard to predict.
“We are finding that inflows are under pressure compared to the same time last year, although we have seen an encouraging
pick-up in inflows during September.”
He said the foreign exchange shortage could impact small to medium enterprises in terms of priority areas set by the Bank of PNG.
“It’s really a matter of scale. Fuel and food imports are prioritised but proportionately the SME sector are on a similar footing in terms of their backlog of orders.
“US$100,000 won’t do much for the larger importers but can make all the difference for a smaller operator. In terms of sectors impacted, all importers are experiencing difficulty with depleted stock levels now taking longer to replenish.
“Westpac’s role, and that of all the banks for that matter, is to service the currency needs of all sectors but to also support the priority sectors as identified by the Central Bank.
“Of course, this means that from time to time we find ourselves in a position where it’s necessary to ration the currency across a large customer cohort.”

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