Central Bank Encouraged To Solve Forex Problem

by PNG Business News - September 05, 2022

Photo: Prime Minister James Marape

The Central Bank has been encouraged to take action and resolve the problem of the country's businesses having a backlog of foreign exchange, according to Prime Minister James Marape.

“We’ve reached a K11 billion threshold as far as Forex is concerned. We work to ensure we bring in additional liquidity into the market and so Mr. Popoitai (Central Bank Governor) and those in the financial sector, let’s free up the space and allow free flow so that especially those that are traditional and key importers/exporters, business players in our country get their share in the queue much better and faster,” he said.

Mr. Marape was replying to inquiries regarding the government's goals for addressing issues including market forces' access to foreign exchange from Ian Tarutia, head of the PNG Chamber of Commerce and Industry.

While it is encouraging news that the government would concentrate on changes to boost trade and investment, particularly in the manufacturing, agricultural, and natural resources sectors, Mr. Tarutia stated there are still issues that need to be resolved.

The availability of foreign exchange and the high cost of the internet as a result of wholesale market inequalities, he claimed, as well as recent import duty costs and retrospective fines and penalties, have an impact on ordering goods for finished goods like biscuits, noodles, and stock feed, some of which are exported abroad.

Mr. Marape asserted that there is no free flow of funds to consumers from the bank and urged the Central Bank to collaborate with commercial banks to find a resolution to this problem.

“Having K11 billion in the Central Bank is enough to cover for nine months of forex coverage in our country,” he said.

“I just want us to liberate that space. Let’s liberate that space for that our businesses and are functional instead of having a long queue.

Something that I will be interested to look at. I want your advice to the bank and the government and hopefully (working) together we can alleviate this problem.”

 

Reference: Post-Courier (31 August 2022). “Central Bank Urged To Address Forex Issue”.



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