Bakani: Policy reforms in agriculture, SME will strengthen Kina

BANK of PNG governor Loi Bakani says policy reforms in agriculture and small-to-medium enterprises will strengthen the PNG Kina against other currencies.
Bakani told stakeholders at the certified practicing accountants (CPA) conference in Lae it had been the country’s lost opportunity for years. He said from 2012 to 2020, the value of PNG Kina had depreciated by 41 per cent.
When the PNG Liquefied Natural Gas (LNG) gas project began exporting, the kina value against United States dollars was as high as 0.4 toea.
“When foreign exchange from PNGLNG stopped, there wasn’t sufficient forex coming in or from other mining or non-mineral sectors to sustain the appreciation of kina,” he said.
Bakani said if policies were in place to encourage the agriculture and SME sectors, import substitution and export promotion, kina would have remained stable.
“In the last two years, we’ve seen a big pick-up in the export of non-minerals, especially in agriculture, to generate a lot of forex.”
He told stakeholders to reduce imports and encourage more exports.
Bakani said the Wafi-Golpu project, Porgera mine and the Papua LNG projects could reverse the trend and strengthen the Kina.
“This is the idea to address these shortcoming with the PNG LNG project where the government gets early revenue, foreign exchange comes to banks and helps exchange rates to appreciate.”