Foreign reserves down: BPNG

THE country’s foreign reserves fell by K209.45 million at March 31 from last Dec 31 figures, according to the Bank of PNG (BPNG).
Acting governor Benny Popoitai in BPNG’s quarterly economic bulletin for the September quarter 2021, said that the level of foreign |exchange reserves was about US$3.08 billion (about K10.66 billion) at March 31, compared to US$3.29 billion (K11.34 billion) at last Dec 31.
“As at March 31, the gross foreign exchange reserves fell, mainly reflecting the Central Bank’s interventions in the foreign exchange market and for re-payments of Government loans,” he said.
Popoitai noted that the Central Bank was responsible for managing the country’s foreign exchange reserves prudently to ensure that current and future needs of the economy were met.
He reiterated that the export sector was the primary source of foreign exchange inflows and not the Central Bank.
“The bank intervenes in the foreign exchange market to supply foreign currency when necessary,” he said.
“In fact, the Central Bank has been intervening consistently on a monthly basis of US$50-US$60 million (about K171.8 million-K206.17 million) since 2020 due to the shortage of foreign exchange.
“With the export sector not consistently providing sufficient foreign currency to meet the high import demand in the domestic market, a higher than sustainable intervention by the Central Bank will only deplete foreign exchange reserves.
“For this reason, the Central Bank will always be prudent and responsible in the management of the country’s reserves.”