Exec: Seasonal factors push export volume down

The National Business

FOREIGN currency (forex) volumes from exporters declined in the first quarter of the year by 12.5 per cent, compared to the final quarter of last year, says a bank executive.
Rohan George, the Bank South Pacific group general manager treasury, said the decline was due to seasonal factors such as price and production.
George provided the observation in the bank’s quarterly market insight released yesterday.
He highlighted the emerging trends in the forex market and trade on the back of the Covid-19 and the decline in commodity prices.
He also said that:

  • Outstanding importer forex orders tripled in volume in the quarter, driven by New Year ordering, while exporter volumes fell;
  • Importer forex requirements have only just started to decline, in response to the Covid-19 disjointed supply chains, softer domestic economy and there is expected reduced ongoing monthly import demand to reflect the contraction of the domestic economy; and,
  • The Central Bank intervention declined in the first quarter but is expected to increase in coming months with the release of the Covid-19 response funds from the International Monetary Fund, World Bank and Asian Development Bank.

On whether the Kina would contineu to devalue against US dollars, George said based on current global environment, a large devaluation of Kina was unlikely.