Country’s forex drops to K6.3bil, says BPNG

Business

THE country’s foreign reserves currently stands at around US$1.9 billion (K6.3 billion), down from US$2.2 billion (K7.2 billion) last year, according to Bank of Papua New Guinea (BPNG).
Governor Loi Bakani, pictured, when providing an update on Monday, said that this decline was due to the various interventions in the foreign exchange market as well as the repayment of the sovereign bond interest.
“Our reserves currently stands at US$1.9 billion,” he said.
“So you can imagine from US$2.2 billion down to US$1.9 billion.
“Most of the decline is because of our interventions.
“Apart from that, this year we’ve also started paying significant interest on the sovereign bond.” The government secured a loan worth US$500 million (K1.6 billion) from the multinational financial service agency Credit Suisse last year in an effort to resolve the country’s foreign exchange situation.
“The sovereign bond is committing the Government for two payments a year,” Bakani said.
“Just for the interest only.
“After 10 years, then the government will have to pay the principle.
“But between now up until the 10th year, the government will have to pay interest.
“That’s also what has been taking up some of the dollars.
“On top of that they have other debt servicing requirements that are done through us.”