Leave currency alone, don’t devaluate Kina


IN this global economic slow down period, it is not advisable for the Papua New Guinea to take heed of some business interest groups to even contemplate on Kina devaluation.
Such a monetary policy shift will make PNG consumers worse off in an induced inflationary environment even into the longer term due to the prevailing high propensity to import basic consumer products like rice.
Take for instance, a 10kg bag of rice is retailed at K33 may increase beyond the K50 mark if such a policy change is entertained to the detriment of low-income earners since PNG is yet to have a domestically grown rice industry to fully replace all imported rice.
Other speculators should not promote their monkey agenda to make fast money by bringing their offshore-held foreign currency to earn more Kina in local bank accounts in the hope that the currency will appreciate in the next six to 24 months to use less Kina to buy more foreign currency at the suffering of consumers under an inflationary environment.
It will be better to leave the value of the currency as it is to appreciate or depreciate by managed market forces.


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