Brace for economic tough times: Polye

 Opposition Leader Don Polye says the country should brace itself for tougher economic times ahead as the Government releases more foreign exchange reserves. 

He said yesterday it was inevitable that more foreign exchange reserves would be released and the effects would be very damaging.

Polye claimed it was the reason Puma Energy was experiencing foreign exchange problems in buying overseas fuel products.

“The Government needs to release K1 billion or so from our current US$2 billion foreign reserves into liquidity,” he said.

“That’s effectively what will happen.

“When that happens, there’ll be a big slump, a big shock to the economy.

“I’ve been saying all this time that the Bank of PNG and the Government should not peg the kina, should not set the ratio.”

Polye said it was exactly because of this that Port Moresby was experiencing the current fuel crisis.

“Our exporters are suffering because of this temporary kina exchange rate,” he said.

“What will happen now is that the Government will release some foreign exchange.

“What will happen is that it will relieve the exporters but we will suffer because inflation will skyrocket with the demand that has been created for foreign exchange.

“We’ve got a Government that is economically illiterate … it doesn’t know what it’s doing.”