Liquidity in the Foreign Exchange Market has Improved

by PNG Business News - July 26, 2021

Photo Credit: Michael Bilotta

FX market liquidity improved in the second quarter of 2021, with FX market turnover increasing by 19.7%.

FX market liquidity increased in the June Quarter 2021, according to the BSP Pacific Economic & Market Insights Quarter 2 Report, with market turnover reaching 23.9 per cent in June and 19.7 per cent in the June Quarter 2021.

“FX inflows for the 1st half of 2021 were up 1.8% from one year ago. Reduced foreign currency supplied to the market from Barrick was offset by firmer copper and palm oil prices, combined with increased project-specific and donor foreign currency inflows,” BSP Group General Manager - Treasury Rohan George commented.

The Kina is expected to stay constant versus the US dollar, while the Kina/Australian dollar cross rate will benefit from a stable Australian dollar.

George predicted that FX market turnover will decline in the September quarter, compared to the high levels observed in the middle of the year.

“Outstanding FX orders reduced by 60% over the June quarter, due to strong foreign currency inflows, however as FX inflows taper in July, August outstanding FX orders build up again,” he added. 

 

Reference:

Loop (21 July 2021). “FX Liquidity Improves”.



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