Country’s banking liquidity improving: Kina Bank

By CLARISSA MOI
THE overall banking liquidity in the country has improved due to the intervention by the Bank of PNG (BPNG) and a slow-down in banking system lending growth during the Covid-19 period, according to the Kina Bank.
Chief executive officer Greg Pawson told The National that despite the economy starting to recover from a period of slowdown, there continued to be uncertainty surrounding the Government’s policies towards international investment, particularly in the resource sector.
“We anticipate business conditions to be relatively constrained for the remainder of the year,” he said.
Bank South Pacific chief executive Robin Fleming when asked about domestic liquidity in the country said that it currently sits at around K1.2 billion, a contraction from K1.9 billion in late July.
He added that despite the reduction in liquidity due to the Bank of PNG intervention, the overall system liquidity remained strong.
Pawson also said the foreign exchange market had improved over the past four months.
“Continued foreign exchange support by the Bank of PNG, seasonal coffee exports, and recovery in some mining related activities have assisted the market,” he said.
“While there has been some improvement after the Covid-19-related lows, the foreign exchange market and the kina remain under pressure and we expect the kina to continue its gradual depreciation against the United States dollar.
“In addition, we are entering the festive buying period of October and November which is when import orders increase in preparation for the festive season.”
Meanwhile the PNG Manufacturers Council chief executive Chey Scovell said there had not been any notable easing.
“We still have businesses under significant distress from a lack of foreign exchange.”