He said the amendments put at risk on the financial future and international reputation of Papua New Guinea.
Amendments to the Central Bank Act was unanimously passed by Parliament in December 2021.
Treasurer Ian Ling-Stuckey said it is the start to modernizing the Bank of PNG.
In a press release, Ambassador Lupari described the amendments made to the Central Bank Act as a big mistake and dangerous for the country.
He said the amendments, passed in the last session of Parliament will erode the independence of the Bank, adding that it will put at risk the financial future and international reputation of our nation.
“These amendments strike at the heart of good governance and financial management. The Government has removed key mechanisms that protect the integrity of our monetary system and independence of the Bank.”
Lupari added that the Government has already eroded the power of the bank through amendments made in September 2020, by increasing the threshold of government access to reserves.
The former chief secretary said the amendments erode confidence, impact on macroeconomic policy and will have far reaching consequences for the nation’s credit rating and the stability of the PNG kina.
“What we are seeing now is what happened with our state-owned enterprises with boards becoming politicised and independence being removed”.
He noted that in other countries where the independence of the central bank is taken away, they were forced to print money. Lupari said in the case of Zimbabwe, the value of the local currency became worthless.
He is supporting calls made by Oro Governor, Gary Juffa and East Sepik Governor, Allan Bird to repeal the amendments.
Meantime, former Head of Financial Analysis and Supervisory Unit and former Deputy Governor, Benny Popoitai, will be sworn in as Acting Governor for Bank of PNG.
Minister for Treasury Ian Ling-Stuckey said this is the start of the reform process to modernize BPNG in improving its governance, accountability and independence.