Foreign Exchange

The results for the survey were officially announced yesterday during a special business breakfast event at the Stanley Hotel in Port Moresby where a detailed analysis was provided by Westpac’s Senior Economist Justin Smirk.

The event also marked the launch of the 2024 edition of the Business Advantage PNG Annual publication, in which the survey is published.

Minister for Petroleum and Energy Kerenga Kua announced in a recent media conference that the declaration was effective 1^st September, and ends 30^th September, 2023.

Kua said the objective is to achieve long-term measures to ensure a stable, uninterrupted fuel supply in the country.

During a recent press conference in Port Moresby, Minister Kua said consultation work began after the declaration with merging results but more needs to be done.

“We have extensive consultation with stakeholders involved in the supply of fuel and in the support of foreign exchange including the banking industry,” he said.

He said the discussion resulted in short-term outcomes to address the issues and were achieved.

This is due to a 58 percent increase in BPNG FX intervention, according to BSP’s June Quarter 2023, Pacific Economic & Market Insights report.

“Excluding BPNG intervention, market turnover rose 12 percent in the June Quarter, but remains flat (unchanged) in 1H-2023 when compared to 1H-2022,” Rohan George, BSP’s Group General Manager for Treasury said.

He highlighted lower commodity prices as the main reason behind no growth in FX turnover. “In 2023 Palm Oil prices are down 40 percent, Oil down 20 percent, and Copper down 10 percent on 1H-2022 averages.

Minister Richard Maru outlined the objective when announcing the new PNGX Corporate Debt Market. 

The current total market capitalisation is K135 billion. The target represents an increase of 350 percent.

“We would like to thank the Minister for his final approval of the new corporate debt Market,” said PNGX Group Chairman, David Lawrence. 

“We would also like to thank the International Finance Corporation (IFC), the ADB Private Sector Development Initiative (PSDI) and the Securities Commission of PNG for their work and support.”

In a recent press release, Mr Lelang called for a recall of Parliament to address the issue urgently.

Lelang said, “The fuel shortage is only symptom of another problem. Soon it will be shortages of imported food and other essential inputs for the smooth operation of business and commerce in the country.”

According to the 2022 BSP Quarter 4 Pacific Economic and Market Insights Report, foreign exchange (FX) market turnover for 2022 increased by 17.3 percent compared to the prior year.

BSP Group General Manager for Treasury Rohan George said, “FX turnover in 2022 was supported by strong commodity prices, in particular Oil, Copper, Palm Oil, and Coffee. These firmer commodity prices assisted to offset the lost FX inflows from the closure of the Porgera gold mine.”

Prime Minister Marape in a statement said the case of Puma being unable to maintain the supply of fuel products to its customers was because of ongoing issues with Bank of PNG (Central Bank), for which the country was being held to ransom.

PM Marape has asked BPNG, immediately after an urgent National Security Advisory Committee today (January 5, 2023), to find a short-term solution by lifting restrictions on Puma so that their supply of fuel products continue without compromising Central Bank’s fiduciary requirements.

“Without compromising Central Bank’s role in ensuring that transactions are legitimate and proper, I appeal to it to exercise wisdom and not just be a policeman, but use monetary policy and the Bank as an incubator of economic activity in PNG.

“The Government is also looking at the arrangement with Puma, whereby they have a monopoly in PNG, and does not want the country to be placed in a dangerous security situation.

“I ask the Central Bank to clear the order for the supply of fuel products by Puma to continue, in the meantime, as we find permanent solutions.”

This restriction was effective as of Wednesday 4^th January, 2023; and affects Air Niugini and all other airlines operating throughout Papua New Guinea.