Polye calls on bank to lift peg on kina-US$

National, Normal

The National, Wednesday October 15th, 2014

 KANDEP MP Don Polye has expressed concern over the pegging of the kina against the US dollar by teh Bank of PNG.

Polye (pictured) supports a similar concern raised recently by the manufacturers council about companies facing transaction difficulties with the central bank. They claimed it had restricted the purchase of US currency when the companies wanted to pay their bills. 

“The BPNG has exerted tremendous pressure on the companies as they could not pay their overseas suppliers and it affects their operations,’’ Polye said.

“The Government has interfered in the trading of the kina by disallowing the kina to trade at the normal market exchange rate.  

“There is sufficient foreign currency reserve of about US$2 billion (K5.5 billion) to trade well at a stable kina rate for this fiscal year. There was no need to peg the kina at the highest exchange rate as it has occurred recently. The pegging of the kina has penalised the manufacturing industry and merchants in PNG, apart from the agriculture, fisheries and forestry sectors. The Government has failed to reduce the inflationary pressures and it is a cost to the businesses.”

He said he had warned Prime Minister Peter O’Neill about “such repercussions”. 

Polye said the economy was dependent on the private sector and businesses should not be penalised.