Lecturer: Keep foreign currency afloat

UPNG Economic Lecturer, Kelly Samof says to facilitate these purchases the country needs foreign currency on a daily basis continuously.

He explains that on the supply side, the main sources of foreign currency are receipts from exports and payments from resource companies such as royalties.

Speaking at the media briefing on Foreign Exchange (forex) today, Mr Samof said given the country’s small and relatively underdeveloped manufacturing sector, there is a high demand to import a variety manufactured goods for households and business use.

PGK continues drop against USD

According to BSP’s Pacific and Economic Market Insight report, the Kina has traded flat in the first quarter of 2021, while year-on-year, it depreciated 2.4 percent against the US dollar, from 0.2920 to 0.2850.

Rohan George, BSP Group General Manager – Treasury, said: “The US Doller rallied against most currencies, as higher than expected economic and employment growth created inflationary concerns and fueled speculation that the US Federal Reserve would tighten monetary policy earlier than markets had initially expected.”

US$790m debt for Forex

Prime Minister Peter O’Neill made the announcement recently.

The Prime Minister said the World Bank along with the ADB is working on the drawdown of US$300 million each to assist with the Foreign exchange in the country.

He said the Credit Suisse Bank were also preparing legal documents for a US$190 million.

All in all, a total of US$790 million will be available for this financial year.

O’Neill clarified that the money will go straight to the Central Bank then to the commercial banks.


Forex issue hits businesses hard

Institute of National Affairs Director (INA), Paul Barker, said even exporters at some point need to replace equipment and pay for service provided from overseas, or wish to invest further for the future development of their business.

As highlighted in the 2017 INA Private Sector Survey, shortage of foreign exchange is now considered the most serious impediment to business and investment in PNG.

Cooperation needed on FOREX issue

In an interview with Loop PNG Collings said they are working very closely with key agencies to address the problem whilst maintaining normal flow of operations.

“We work very closely with the central bank and obviously the commercial banks to ensure that we are maintaining flows of currency to pay for our crude, and our finished products that we bring into the country,” he said.

Shortage in foreign currencies delay dividend payments

Steamships Trading Company Limited in a statement to Port Moresby Stock Exchange notified that the interim dividend payment of 2016 will not be effected on Sept 30, 2016 for non-PNG shareholders due to the mentioned reasons.

Currently due to Bank of Papua New Guinea exchange controls there is a large back log of currency purchase orders

However, it is anticipated that payment will be effected by Oct 10, 2016 on current conversion availability.