MP wants economy managed well

 Opposition leader Don Polye yesterday called for extreme caution in managing the country’s current economic situation amidst falling commodity prices and a declining foreign exchange.

He said that while the Central Bank had intervened, slowing down depletion of foreign reserves to US$200 million (K600 million) per month, “the real situation from our observation, is completely different”.

“We believe that the actual foreign reserves is quite contrary in our view to what the bank is saying of nine to 10 months of import cover,” Polye told a press conference.

“The Opposition’s view is that the import cover is much less than nine months.

“We believe it is at five to six months.

“If we take into consideration the level of foreign currency trade, the amount of trade that you see queued up at commercial banks in Papua New Guinea has exceeded a billion kina.

“That means the demand for imports is high, but the amount of foreign currency that is available to the banks has been very minimal.

“Therefore, you see this backlog of orders for foreign goods still in the queue at the banks.

“That means that if you consider these queues in the banks, with the monthly release of the US$200 million, you will see that the actual demand out there is  not US$200 million but it will be three or four times that amount.”

Polye said the Opposition also believed that the Central Bank was not telling the truth that foreign reserves amounted to US$1.8 billion (K5.3 billion).