Foreign exchange inflow expected to continue: Bank

FOREIGN exchange (FX) market inflow momentum is expected to continue from the first quarter of 2022 into the half-year, according to Bank South Pacific Financial Group Ltd (BSP).
Group general manager for treasury, Rohan George said this would be assisted by firmer commodity prices, end of half-year dividend flows and foreign aid.
“As FX inflows can be lumpy, we expect there to be periods where outstanding FX orders build up. “To manage volatility in foreign currency flows, businesses should place FX orders (with correct documentation), as soon as possible, ensure orders are cash-backed whilst awaiting execution, ensuring tax clearance certificates are current and reflect the expected FX order execution time,” George stated in the BSP Pacific Economic and Market Insight Q1 2022 Report.
He emphasised in the report that in the first quarter of 2022, FX market turnover fell 2 per cent from the strong December quarter 2021, but rose 24 per cent from March quarter 2021, supported by strong commodity prices in oil, copper, palm oil and coffee.
“Firmer commodity prices offset the lost FX market inflows from the closure of the Porgera gold mine (Barrick FX inflows down 75 per cent), while the stronger commodity prices added to transportation and input costs of imported goods increased the volume of new FX orders placed post-Christmas.”
Meanwhile, the outstanding FX orders expectation of reopening the Porgera mine is also positive from foreign exchange perspective remained similar to levels seen 12 months ago.