Foreign exchange inflows increase in 2019, says Bakani

Business

By SHIRLEY MAULUDU
FOREIGN exchange inflows improved in 2019, reflecting increased export receipts and external budget financing, Bank of PNG Governor Loi Bakani says.
Bakani noted in a monetary policy statement released last Thursday that these inflows, together with the Central Bank’s intervention, significantly reduced the backlog of foreign exchange orders.
However, he said new orders continued to remain high.
“Projected inflow of external budget financing in 2020, together with additional external support.”
In a recent interview with The National, businesses expressed concerns on the issue for foreign exchange supply.
They said the ongoing foreign exchange currency shortage in the country was at its worst with unconfirmed rumours that there was currently no available US dollars.
This resulted in company projects being delayed as well as creditor debt increasing for some businesses.
Paradise Foods Ltd chief executive officer James Rice said it also seemed that the Covid-19 pandemic had added to the issue.
Trukai Industries Ltd chief executive Greg Worthington-Eyre shared similar sentiments saying: “Forex appears worse than previous times and so our creditor balance has been growing.”
Brian Bell chief executive Cameron Mackellar said: “It is a genuine issue for every business importing product.”
Meanwhile, PNG National Research Institute (NRI) in an issues paper it recently release noted that the Government needed to make it mandatory for big resource companies in PNG to bring onshore, foreign exchange earnings and not park them in offshore foreign currency accounts.
According to NRI, this would address the foreign exchange shortage. This was one of the six recommendations the ‘think tank’ released last week in an issues paper providing an analysis of progression of the National Budget from 2019 Budget under the O’Neill-Abel government to 2020 Budget under Marape-Steven Government.
Authored by director Dr Osborne Sanida, the paper highlighted that the paradox of foreign exchange shortages required a change in mindset and strategy.