Sovereign bond will bring foreign reserves: Barker

If the National Government is successful in securing a sovereign bond on the international bond market, it will support the depleting foreign currency in the economy, says an economist.

Institute of National Affairs executive director, Paul Barker said: “This is an exercise to reduce hard dependence on the local market; the government have been sustainably funding the budget gap for the last 18 months so, by borrowing heavily from the domestic market, from the bank, other institutions, treasury bills and other mechanisms.  

“The capacity and readiness of the domestic market to provide the level of funding is limited.

“Also the Government and Central Bank would like to have more access to foreign reserves, and borrowing internationally and competitively would be an attractive diversification and would also launch PNG in the global financial market,” Barker said.

The 2017 National Budget paper states that securing a sovereign bond funding is one of the areas the government will take to plug the gap on the declining revenues flowing into the country’s purse to support this year’s budget.


Charles Yapumi