Effective government policies sought to support key sectors

MANAGING the perception and reality of currency depreciation will be crucial for maintaining foreign investor interest, according to the PNG Stock Exchange (PNGX).
PNGX chairman David Lawrence said transparent and consistent economic policies could help.
“Ensuring that investors have clear and reliable information on economic conditions and government actions can mitigate fears.
Furthermore, establishing supportive measures for businesses to cope with currency fluctuations can help maintain an attractive investment climate.
This is essential to secure both the short-term inflow of investments and the long-term sustainability of those investments in the country.”
He said the depreciation of the Kina presented both challenges and opportunities.
“Businesses that are heavily reliant on imports may face challenges but businesses that are heavily reliant on exports may be presented with opportunities,” he said.
“Depreciation may enhance the competitiveness of exports and potentially incentivise the development of local industries to substitute for the increased cost of imports.
“The overall impact on the economy and foreign investment will depend significantly on the government’s ability to implement effective economic policies and provide support for key sectors during the period of currency adjustment.
“The ability to attract and retain investment, particularly in new and expanding sectors, will be critical to reducing any adverse effects of the currency’s depreciation.”