Bakani: Boost economy

The National Business
Loi Bakani

BANK of Papua New Guinea Governor Loi Bakani says that the country’s economy requires a major boost to achieve higher economic growth over the coming years.
However, Bakani was encouraged by the conclusion of the Papua Liquefied Natural Gas (LNG) project agreement and the commencement of negotiations for the P’nyang LNG project between the state and the developer.
According to the bank’s Quarterly Economic Bulletin (September Quarter 2019), released yesterday, Bakani also encouraged the Government and project partners to progress the development of mineral and gas projects as they would have a significant impact on economic growth and support the foreign exchange market.
While providing an update of the average daily kina exchange rate, he said that at the end of December, 2019, the average daily kina exchange rate depreciated against the pound sterling by 4.3 per cent to 0.2284 (K1)
The US dollar by 0.2 per cent to US$0.2939 (K1) while it appreciated against the Japanese yen by 1.1 per cent to ¥31.9474 (K0.99), against the Euro by 0.3 per cent to €0.2654 (K1) and the Australian dollar by 0.2 per cent to A$0.4300 (K1). “These currency movements resulted in the Trade Weighted Index (TWI) that depreciated by 0.1 per cent to 29.7,” Bakani said.
“At the end of December, 2019, the level of foreign exchange reserves increased to K7,832.97 million (US$2,338.14) mainly reflecting the budget support loans from Australia and the ADB.
Bakani also noted that during the quarter, the kina exchange rate remained relatively stable, as indicated by the TWI which showed marginal appreciation. “Annual headline inflation in the September quarter eased to 3.3 per cent from 3.9 per cent in the June quarter.
“During the quarter, the kina appreciated against most trading currencies except the US dollar and the Japanese yen. “These movements resulted in the TWI appreciating slightly by 0.47 per cent to 29.716 in the quarter.”
“With the continued downward trend in inflation outcomes and stability in the exchange rate and other macroeconomic indicators.”