Kina continues to hit slump

Kina continued to depreciate against major world currency because of lower revenue income into the national purse.

The Bank of Papua New Guinea Governor Loi Bakani stated in its Monetary Policy Statement for the month of September 2016.    

According to today’s Bank South Pacific Exchange Rate, K100 will give you US$ 26.50 and AUS$ 34.71.

The Kina dropped by 9.5 per cent in a space of 12 months.   

“PNG continued to experienced low export commodity prices during the nine months to September 2016. These resulted in low foreign exchange inflows and lower Government revenue,” Governor Bakani stated in the policy statement.    

“The Kina deprecated against the US dollar (US$) from US$0.3485 at the end of September 2015 to US$0.3155 as at 20th September 2016 by 9.5 per cent due to lower currency exchange inflows  and strengthening of the US Dollar.

The Kina rate also depreciates against the Australia Dollar (AUD) over the same period by 17.3 per cent to AU$0.4110.

“The persistent high level of liquidity in the banking system is contributing to the weak transmission of the Kina Exchange Rate to market interest rate.

“The Bank’s decision to have an alternative policy mechanism is still being assessed in consultation with various stakeholders, both domestic and external. The aim is to have a policy rate that reflects the cost of funds and inflation expectations and a supporting mechanism that will improve the transmission to market interest rate.”

     

Author: 
Charles Yapumi