Restrictions disastrous: Smare

THE Gold Bill’s restriction of the Central Bank independence in the production of national currency will spell disaster for the nation, says Papua New Guinea Chamber of Resources and Energy president Anthony Smaré.
Smare warned in a statement yesterday that this would lead to of uncontrolled inflation and significant deterioration of the PNG Kina.
He said the reforms introduced by Sir Mekere Morauta, when he was prime minister, made the Bank of PNG (BPNG) independent from Government and foreign forces, in its control of monetary policy and regulation of the banking sector.
Under the Central Banking Act, the BPNG alone is authorised to issue currency notes and mint coins for the country and controls the flow of money in the PNG economy.
Smare said the National Gold Corporation Bill had provisions which effectively removed the BPNG’s independence.
He said that Section 329 and 330 of the NGC Bill explained that the National Mint company had the exclusive right to make currency.
Section 331 says that the BPNG cannot use anyone else to make currency on its behalf other than the National Mint company.
The Bill now provides directions for the Central Bank not to mint or Issue Gold Coins. The role of the Central Bank in producing and issuing gold coins, (for circulation or non-circulation) will now be replaced or transferred to the privately-owned National Mint with no restrictions on currency production (s.332). Section 326 of the NGC Bill directs that a Director-State Equity can serve a notice to the Governor of PNG to arrange for the National Mint company to make and print currency and coin as and when it sees fit.