Bank of Papua New Guinea: Foreign Exchange Increases
by PNG Business News - February 17, 2022
Photo: Bank of Papua New Guinea
According to a top official, the volume of foreign exchange in Papua New Guinea increased over a six-month period last year.
Benny Popoitai, the acting governor of the Bank of Papua New Guinea, said this was mainly owing to the World Bank's budget assistance loan, liquefied natural gas (LNG) tax collections, and donor funding.
Foreign exchange reserves were at US$2.49 billion (about K8.625 billion) on June 30 last year and had risen to US$2.6 billion (around K8.997 billion) on December 7.
BPNG has maintained its accommodating monetary policy stance since the easing in March 2020, according to Popoitai, in order to assist economic recovery.
The cash reserve requirement (CRR) and kina facility rate (KFR) remained unchanged at 3.0% and 7.00%, respectively.
Except for the Japanese yen and the euro, he claimed the average daily kina exchange rate fell against all major currencies.
He said the kina had declined by 0.2 per cent to US$0.2850, 4.4 per cent to £0.2150 against the British pound and 3.2 per cent to AU$0.3999 against the Australian dollar.
The kina, on the other hand, rose by 4.7 per cent to 32.36 yen, while the euro rose by 0.3 per cent to €0.2524. The trade-weighted index (TWI) fell by 1.4 per cent to 27.46 over the same time period as a result of these currency moves.
“The level of gross foreign exchange reserves at the end of June 2021 was K8.586 billion, sufficient for 8.6 months of total and 16.2 months of non-mineral import covers.
“The Central Bank maintained a neutral monetary policy stance in the June quarter of 2021, keeping the KFR unchanged at three per cent.
This was to encourage private sector activity and support the economic recovery.
The repurchase agreement facility dealing margins were also maintained at 100 basis points on both sides of the KFR.”
In order to regulate liquidity, he added, BPNG has used its open market operation tools in conducting monetary policy.
Reference: The National (15 February 2022). “FX jumped over 6 months in ’21”.
PNG Business News - March 22, 2021
Fleming: Trade is Important for Forex
The availability of foreign currency is crucial for promoting trade and enabling companies to continue importing goods for consumer consumption. It's also essential for investors to know that returns on capital investments can be repatriated if and when enough foreign currency is available in the country, according to Bank South Pacific CEO Robin Fleming. When asked if there is a continuing foreign currency shortage in the country, he said that while foreign currency issues are likely to continue for another two to three years, the prospects for a rebalancing of foreign currency supply and demand are optimistic once construction work on the Papua LNG begins. “Businesses have conditioned themselves to not being able to access foreign currency in a timely manner.,” he said. “But in doing so they have in certain instances forgone growth opportunities and put aside larger investments that would have assisted grow their business.” While reflecting on the rise in COVID-19 cases, Fleming noted that many companies will be worried about the growing number of positive cases. In response to a query about the BSP status, he claimed that their regional businesses have had to deal with the effects of COVID in each of their countries, with travel restrictions affecting their tourist-related industries. In what he described as a difficult year, he said most people did reasonably well. “Our focus in 2021 is to bring our new banking system online in Vanuatu and PNG in 2021 and other countries thereafter,” Fleming said.
PNG Business News - July 26, 2021
Liquidity in the Foreign Exchange Market has Improved
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”.
PNG Business News - November 08, 2021
FX Liquidity Increases In Q3, According To BSP
According to Bank South Pacific Financial Group Ltd, foreign exchange (FX) liquidity has increased since the second quarter of the year, owing to robust commodities prices mixed with project-specific and donor foreign currency inflows (BSP). The PNG Kina has stayed constant versus the US dollar for the third consecutive quarter, according to the bank's Pacific Economic and Market Insights Q3 2021 Report, although FX reserves at the end of June increased by 7% quarter on quarter, owing to favourable inflow. According to the report, overall foreign exchange reserves were US$2.49 billion (about K8.5 billion) as of June 30. In June, reserve balances rose 7% quarter over quarter, with positive inflows overcoming the Central Bank's monthly intervention of $50 million (about K171.6 million). While FX liquidity increased by 17% in September, BSP Group general manager for treasury Rohan George noted FX turnover increased by 18% during the previous six months, owing to robust commodity prices, particularly for oil, copper, palm oil, and coffee. “Firmer commodity prices, combined with increased project-specific and donor foreign currency inflows offset the lost FX market inflows from the closure of the Porgera gold mine,” he said. “Momentum in FX market turnover is likely to increase into year’s end. Outstanding FX orders have increased from low levels seen in June, and this is expected to continue in October and November with pre-Christmas import orders. “We expect large foreign currency inflows in late November and December to satisfy any foreign currency backlog. “And to manage reduced FX liquidity, businesses should place FX orders (with correct documentation), as soon as possible, ensure orders are cash-backed whilst awaiting execution, tax clearance certificates are current and reflect the expected FX order execution time,” George added. “It was also reported that the kina has been stable and unchanged against the US dollar for the past 11 months; however, the pullback in the AUD/USD (Australian dollars/US dollars), amid Coronavirus (Covid-19) related weakness in the Australian economy, strengthened the Kina/AUD, and the Australian dollar is expected to outperform into year’s end as the Australian economy opens up.” Reference: The National (1 November 2021> “FX liquidity rising in Q3: BSP”
PNG Business News - May 16, 2022
Get over it... with PNG Forest Products' NiuBridge
Photo: NiuBridge on the Boluminski Hwy, New Ireland, PNG You know how they say, “Build a bridge… and get over it”? Well with PNGFP NiuBridge you don’t have to build it, because it’s already built! These expertly designed and engineered modular bridges are prefabricated to your specifications by PNG Forest Products. With a design life of 50+ years and installed cost base typically under half that of equivalent concrete or steel, NiuBridge is the ideal, most cost-effective solution for bridging installations in Papua New Guinea. The NiuBridge System includes deck, girders, kerbing and accessories, and comes with a pre-applied bitumen surface. Little maintenance is required thanks to PNGFP’s unique veneer preservation treatment, ensuring complete protection from termites and rotting. NiuBridge is manufactured from PNG plantation pine to both AS/NZS 2269 and AS/NZS 1604 standards and exploits the advantages of natural timber, which is not subject to fatigue failure, unlike other materials such as steel and concrete. Available in single lane, dual lane, or custom design, NiuBridge is suitable for a range of load conditions including Austroads T44 and AS 500 Bridge Design. NiuBridge and sister product NiuDeck are widely used by local and state governments across Australia. The peak body for the timber industry in Queensland has welcomed these products as a demonstration of the versatility and innovation of using Engineered Wood Products in bridge construction. “Using prefabricated timber systems in bridges is gaining greater market recognition due to their inherent strength, light weight and low carbon emissions footprint compared to other construction materials”, said the CEO of Timber Queensland, Mick Stephens. So next time you need to get over it, don’t waste valuable time and loads of money building a bridge. Buy a NiuBridge and get over it sooner and more cost effectively!
PNG Business News - May 16, 2022
Need help with to live, work and study in Australia and with student enrolments in EQI accredited schools? Ask Migration Plus!
Photo credit: Migration Plus Migration Plus is a leading Migration firm in Cairns, in the Far North Queensland region providing professional migration advice to students, individuals, government, businesses and corporate groups including the mining, hospitality, tourism, agricultural and air services industries. Migration Plus are also Education Agents with Qualified Education Counsellors on their team and they represent a number of reputable universities and colleges across Australia, including Education Queensland International (EQI) for student enrolments. They work closely with EQI and have successfully assisted PNG students enrol in schools across Queensland and also assisted with visa applications for the students for many years. With Australian borders opening to international visitors, temporary workers and international students, they can assist you with all migration matters for your business and family to visit, work or study in Australia. Now is the time to start your children’s enrolment to study in any of the EQI’s accredited schools from Prep to Year 12. Education Counsellors at Migration Plus can assist your children’s enrolment for Year 10, Semester 2, the important pathway into senior high school subjects through the Senior Education and Training Plan. Semester 2 commences in July 2022. With an in-depth knowledge of migration law, their specialist team provides a complete solution to your migration requirements and coordinate all facets of your migration needs. The Migration Plus team is very passionate about what they we do – the rewards of being able to assist in changing lives and helping clients achieve their goals is first and foremost. With over 90 years of combined experience available to you, you can count on their highly specialised team for accurate advice. Contact the Specialist team for further information.
Marcelle P. Villegas - May 16, 2022
Australia Opens Its Doors to International Students
Photo credit: Education Queensland International “International students are an important part of the Australian community, and we are excited to welcome them back to our classrooms, campuses and communities.” This was the announcement posted on their website by the Australian Government last February to herald the reopening of international travel to students. “Australia’s borders are open to fully vaccinated international students and Temporary Graduate (subclass 485) visa holders.”  “From 21 February 2022, all visa holders who are fully vaccinated for international travel purposes can travel to Australia without a travel exemption. Unvaccinated visa holders will still need to be in an exempt category or hold an individual travel exemption to enter Australia.”  The Australian Government said that international students will be subject to Australian Government border restrictions and any State and Territory quarantine and testing requirements. Quarantine and testing arrangements for State and Territories are frequently changing. Therefore, international students are advised to visit www.Australia.gov.au/states to be updated with the latest information and announcements of the Australian Government. In relation to this, the Department of Education, Skills and Employment has developed a “factsheet on the reopening of international travel to students” which is available for downloading from the website.  “All visa holders who are fully vaccinated in accordance with Australia’s international border entry requirements are able to arrive in Australia without needing an approved travel exemption. This includes fully vaccinated international students.”  Here are more important reminders from the Australian Government: People who do not meet Australia’s vaccination requirements for international travel must apply for a travel exemption to travel to Australia, unless they are in an exempt category. Visa holders who arrive in Australia may have their visa cancelled and be detained and removed if they: are not fully vaccinated for international travel purposes in accordance with Australia’s border entry requirements; or do not have a medical contraindication to a COVID-19 vaccine as defined by the Australian Government; or are not in an exempt category or hold an individual travel exemption. To be considered as “fully vaccinated for international travel purpose” to or from Australia, one should have completed a primary course of a vaccine approved or recognized by the Therapeutic Goods Administration (TGA). This includes mixed doses. The currently approved or recognised vaccines for travel are the following: Two doses at least 14 days apart of AstraZeneca Vaxzevria, AstraZeneca Covishield, Pfizer/Biontech Comirnaty, Moderna Spikevax or Takeda, Sinovac Coronavac, Bharat Biotech Covaxin, Sinopharm BBIBP-CorV (for people under 60 years of age on arrival in Australia), Gamaleya Research Institute Sputnik V, Novavax/Biocelect Nuvaxovid. Single-dose dose of Johnson & Johnson/ Janssen-Cilag COVID Vaccine are also in the list of approved and recognized vaccines. “At least 7 days must have passed since the final dose of vaccine in a course of immunisation for you to be considered fully vaccinated for international travel purposes. Mixed doses count towards being fully vaccinated as long as all vaccines are approved or recognised by the TGA.” How about exceptions for vaccination requirements and arrangement for children? “People with acceptable proof they cannot be vaccinated for medical reasons, and children under 12, can access the same travel arrangement as people who are fully vaccinated for international travel purposes.” Moreover, temporary visa holders who are younger than 18 years old at the time of departure for international travel to Australia do not require an approved travel exemption when the child is travelling with at least one adult who is fully vaccinated for international travel purposes. “Unvaccinated or partially vaccinated children aged 12-17 years old entering Australia may be exempt from passenger caps and eligible for reduced quarantine requirements. Travellers should always check the quarantine requirements for the state or territory they plan to travel to, or transit through, prior to arranging their travel.” “If the child is travelling with unvaccinated adult family members, then the entire family group will be subject to managed quarantine and passenger caps.” For more information on vaccination travel requirements, quarantine rules, and other related matter, visit https://covid19.homeaffairs.gov.au/vaccinated-travellers. Reference:  https://www.dese.gov.au/reopening-international-travel-students  https://covid19.homeaffairs.gov.au/vaccinated-travellers  Factsheet on the reopening of international travel to students https://www.dese.gov.au/reopening-international-travel-students/resources/factsheet-reopening-international-travel-students