Kina falls against major currencies

 THE local currency kina has depreciated against most major currencies, Bank of PNG (BPNG) governor Loi Bakani said. 

Bakani revealed this when providing a currency overview in the September 2013 Quarterly Economic Bulletin (QEB) last Tuesday, saying as of Dec 20, the kina depreciated against the pound sterling by 9.7%, the Australian dollar by 7.4%, euro by 8.2%, yen by 4.9% and the US dollar by 5.7%. 

“The depreciation against the major currencies is attributed to high import demand and lower foreign exchange inflows,” Bakani said. 

He said the BPNG continued to support foreign exchange market during the year and as a result, the level of gross foreign exchange reserves declined to K6.841.4 billion (US$2.859.7 billion) as of Dec 20, from K7.213.8 billion (US$3 billion) at the end of Sept 2013.

Bakani said to address the downward trend of the kina exchange rate, central bank introduced several measures on liquidity management and foreign exchange market operations followed by additional ones this month. 

“These measures resulted in the official inter-bank market exchange rate stabilising at around US$0.41 and the subsequent in-house commercial bank trading rate at some margin below that, since October. 

“Consequently, the central bank’s intervention in the foreign exchange market has eased and international reserve level has stabilised at around US$2.8 billion, which is sufficient for around eight months of total and 13 months of non-mineral import cover.