By PETER ESILA
BANK of PAPUA New Guinea supplied US$695.2 million (K2.339 billion) into the foreign exchange market to assist in meeting some of the demand for foreign currency in 2018, says Governor Loi Bakani.
This compared to US$227 million (K763.74 million) in 2017.
Bakani said the bank was able to do this from US dollar inflows from the Government’s commercial and budget support loans that became part of its international reserves.
“This assisted to narrow the imbalance between the supply of and demand for foreign currency,” he said.
“This is on top of the authorised foreign exchange dealers (AFEDs) meeting demand for foreign currency from their in-house inflows.”
Bakani said most of these inflows came from Ok Tedi, New Britain Palm Oil Ltd, Ramu Nico, Barrick, Oil Search.
“These companies brought in a lot of foreign exchange last year, and that helped,” he said.
“On top of that, we intervened with US$700 million (K2.3bil)
“From K1.5 billion (backlog) to less than K500,000 is a big improvement.
“The Kina depreciated by four per cent in 2018 and has stabilised at 0.2970 against the US dollar after the Central Bank provided additional foreign currency to the market from its foreign exchange reserves.”
Bakani acknowledged co-operation of commercial banks during this challenging period.
He said that the stability achieved so far should provide some confidence to the market.
Bakani said more needed to be done, both in the short and long-term, by all levels of government and private sector.
“The country should not depend mainly on the mineral sector, but should encourage investments in the non-mineral sectors as well,” he said.
“The Government should look at rebalancing the export base, so that the country is able to support and sustain itself during period of external shocks from slowdown in the global economy and international commodity price volatility.”
Bakani acknowledged the Government’s strategy and commitment to developing and modernising the agriculture and manufacturing sectors to reduce imports, create job opportunities, and improve skills and technology within the country.
By PETER ESILA