Papua New Guinea’s central bank ‘determined’ to get foreign currency in, says Bakani

The Governor of the Bank of Papua New Guinea, Loi Bakani, told this week’s Australia–Papua New Guinea Business Forum in Cairns that the bank is ‘determined’ to obtain more foreign currency ‘as soon as possible’ to address the backlog in foreign exchange demand. However, he criticised claims that PNG’s foreign exchange problem could be solved by allowing a free float of the kina, reports David James.

We are very positive about having options to support the private sector,’ Bakani told this week’s forum. ‘Once we free the backlog, that will free up the market to operate smoothly, both for the in-flows that are coming from the exports and of course to meet the normal demand for imports and service payments.

‘It is the backlog that is creating this issue for us and I think we all appreciate that we have to find a way to look at it.’

Bakani added the discussions with the IFC to provide a US dollar credit facility to PNG’s major banks are ‘ongoing’. He said the central bank is also looking at other sources ‘to address the issue.’