Kina is in good hands, O’Neill says

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The National, Wednesday October 23rd, 2013

 PRIME Minister Peter O’Neill says the kina is in good hands, under the control of the Bank of Papua New Guinea.

He said this yesterday when asked to comment on the depreciation of the kina.

Bank of Papua New Guinea Governor Loi Bakani said on Monday the country could easily weather the storm of the depreciating kina – which started in September last year as a result of the slowdown in LNG construction work as well as falling commodity prices.

Bakani said the bank and other commercial banks had taken measures over the past two weeks, which had seen the kina stabilise at US$0.4140.

“The kina is a floating currency,” O’Neill told reporters.

“This means that supply and demand dictates the rate at which we settle.

“This has been the case so far.

“We know that it (kina) has been depreciating for a while, but largely, it’s because the major currencies have also been depreciating.

“You will see that the Central Bank is managing monetary policy, government does not manage monetary policy.

O’Neill rebutted a statement by Deputy Opposition leader Sam Basil calling on the government to intervene.

“We do not necessarily intervene for the sake of intervening, we engage with the Central Bank governor,” he said.

“The Central Bank is an independent organisation is responsible for the monetary policy of our country and independent management of the exchange rates.”