According to the Bank of PNG (BPNG), the average regular kina exchange rate has depreciated against all major currencies except the Japanese yen as of March 8.
The kina depreciated by 8.1 per cent against the Australian dollar, 7.5 per cent against the British pound sterling, 2.8 per cent against the Euro, and 0.9 per cent against the US dollar, according to BPNG's quarterly economic bulletin for the September 2020 quarter. It appreciated by 1.3 per cent against the Japanese yen.
BPNG Governor Loi Bakani said the country's foreign exchange reserves were K9.5 billion (US$2.7 billion) at the end of December.
“As of March 5, 2021, the level of foreign exchange reserves decreased to K8.46 billion (US$2.41 billion), reflecting debt service payments for the Government and intervention by the Central Bank in the foreign exchange market,” he said.
Meanwhile, the global economy shows signs of improvement in the December quarter of last year, according to reports.
However, the second phase of the Covid-19 pandemic, which included a new virus, began to hit major economies, delaying recovery.
“As a result, most countries have not completely opened up their borders to the movement of people,” he said. “The development and trial of Covid-19 vaccines that continued into the last quarter of 2020 provided some level of confidence for the global market and the world economy. In its January world economic outlook (WEO) update, the International Monetary Fund, projected the world economy to contract by 3.5 per cent in 2020 from its earlier projection of a decline of 4.4 per cent in the October WEO. For 2021, recovery has been upgraded with a growth rate of 5.5 per cent, reflecting the trial and introduction of Covid-19 vaccines.”
