IMF approves financing programs

The International Monetary Fund has approved PNG’s request for a Financing Program in Special Drawing Rights 19 (SDR) of SDR684.3 million, which is equivalent to US$918.0 (K3,232.4) million.

The request, made under its Extended Credit Facility and Extended Fund Facility, will run from March 2023 to March 2026.

The program is for budget support to assist the Government to pursue fiscal consolidation in the medium term and undertake critical reforms to help improve the performance of the economy.

This funding is tied to conditions and reforms that PNG is required to meet, defined as structural benchmarks and quantitative targets under the program to trigger drawdowns over the period.

Acting Governor for Central Bank Elizabeth Genia in her Monetary Policy Statement clarified that in 2023, the first drawdown was SDR65.8 million equivalent to USD88.3 (K310.9) million.

“The reforms will cover areas such as enhancing governance and operationalizing anticorruption framework, strengthening debt sustainability to achieve Government’s medium-term goal of fiscal consolidation, monetary policy and foreign exchange (FX) operations framework reforms including exchange rate management,” Genia stated.

Genia stressed that it is important for the country to fully commit to these reforms in order to achieve the objectives of the program and its medium-term fiscal framework to set the country on a path of inclusive and sustainable growth and stability.

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