The Foreign Exchange market inflows fell 16 per cent from BSP’s Quarter 2 of 2023 to K6 billion, with almost 18 per cent of FX inflows coming from Bank of Papua New Guinea (BPNG).
According to BSP’s Quarter 3 2023 Pacific Economic & Market Insights report, FX inflows have risen 19 per cent to K18.7 billion due to a 79 per cent year-on-year increase in BPNG FX intervention.
BPNG has supplied 20 per cent, that’s K3.8 billion, of PNG’s FX inflows this year.
BSP Group General Manager Treasury, Rohan George noted that despite increased BPNG intervention, the FX market continues to miss Porgera’s FX contribution.
During Q3, volumes from BSP’s Top 5 FX Inflow customers dropped by 30 percent in August and 45 percent in September, resulting in outstanding FX orders hitting a record high late in September (K1.18b), which lengthened FX order execution times. BSP prioritised “National Interest” orders over other orders and trade and service orders over capital orders, says George.
The Kina mid-rate continued its gradual, orderly, decline in Quarter 3 falling by 2.5 per cent to 0.2730 and is expected to decline further by approximately 0.9 per cent per month or 10.8 per cent per annum.
BSP is expecting continued flat trading conditions and potentially a larger than normal Central Bank FX intervention to reduce FX execution waiting times.
FX customers are encouraged to place orders early, with correct documentation to avoid any unwanted delays.