Foreign currency limited: BSP

By CLARISSA MOI
FOREIGN currency availability from the export market this month has been lower than the same period last year, according to the Bank South Pacific.
Group chief executive officer Robin Fleming told The National that it was in part a result of the closure of the Porgera gold mine in Enga.
He said that the Bank of PNG had entered the market on Jan 14 with a large intervention of US$100 million (K346.80mil) which assisted with supply of foreign currency to importers and retail customers.
“BSP has total orders for foreign exchange of K423mil of which K253mil are trade orders and the balance being service and capital transactions,” he said.
“This compares to total import orders of K720mil at the same time in 2020.
“Therefore, while there is still an imbalance between export flows and import demand, the situation has improved over the past 12 months.”
Fleming said BSP had processes that allowed for smaller orders of K25,000 or less to be filled on demand for customers.
It provides retail customers in particular more flexibility and immediate access to smaller amounts of currency on demand than what other commercial banks permit.
“Larger orders go through a more detailed compliance process that involves being placed on an order board with payment timed to receipt of large export flows,” he said.
“But on average, for most customers, the clearance time is at present around three weeks, which is also less than the same period in 2020. Larger exporters will experience longer delays, but in most instances, the total value of their orders has reduced over the past 12 months.
“All customers would welcome the ability to avail themselves of foreign currency on demand but equally many customers also recognise that there has been an improvement in the time to settle foreign currency transactions in recent times.”