“Foreign exchange (FX) market inflows in Q3-23 fell 16% from Q2-23 to K6 billion, with almost 18% of FX inflows coming from BPNG FX intervention,” according to BSP’s Quarter 3 2023, Pacific Economic & Market Insights report.
“In 2023, FX inflows have risen 19% to K18.7b due to a 79% year-on-year increase (K1.7b) in BPNG FX intervention. BPNG has supplied 20% (K3.8b) of PNG’s FX inflows this year,” according to BSP’s Group General Manager Treasury, Mr. Rohan George.
Mr. George noted that despite increased BPNG intervention, the FX market continues to miss Porgera’s FX contribution.
During Q3, volumes from BSP’s Top 5 FX Inflow customers dropped by 30% in August and 45% in September, resulting in outstanding FX orders hitting a record high late in September (K1.18b), which lengthened FX order execution times. BSP prioritised “National Interest” orders over other orders and trade and service orders over capital orders, says Mr. George.
The Kina mid-rate continued its gradual, orderly, decline in Q3 falling by 2.5% to 0.2730 and is expected to decline further by approximately 0.9% per month or 10.8% per annum. Mr. George adds, “We expect continued flat trading conditions and potentially a larger than normal Central Bank FX intervention to reduce FX execution waiting times.”
FX customers are encouraged to place orders early, with correct documentation to avoid any unwanted delays.