TREASURER Ian Ling-Stuckey says strict limits have been set for the Bank of Papua New Guinea (BPNG) when it comes to financing the Government.
He said this following the passage of the Central Banking (Amendment) Bill 2021 in Parliament yesterday.
With the changes, Ling- Stuckey said BPNG had its legislative framework “modernised and strengthened”. “I was extremely pleased that these changes were met with the unanimous support of Parliament, including strong support from the Leader of the Opposition (Belden Namah) for these vital modernising reforms,” he said.
Ling-Stuckey said the reforms focused on three critical areas:
- ENSURING better accountability and transparency by changing governance arrangements from a single person (governor) making decisions to a committee or board
- THE central bank will now give a more balanced approach towards both price stability and growth; and,
- THE setting of strict limits on the role of the central bank in financing Government. The temporary advance facility is to be restricted to dealing with cash flow issues and emergencies only and have clear caps on purchases of government securities.
“These changes are important to modernise and strengthen the combined independence, governance, accountability, and transparency of the eentral bank,” Ling-Stuckey said.
Ling-Stuckey told Parliament that the reforms were a result of a comprehensive consultation process involving key firms and institutions in Papua New Guinea, other central banks in the region and the International Monetary Fund.