Papua New Guinea’s foreign exchange (FX) market remained active in the third quarter of 2025, with total market turnover reaching K16.2 billion (approximately USD 3.86 billion).
According to BSP Financial Group Limited's (BSP) September Quarter Economic and Market Update, this represented a 9% increase compared with the same period last year, supported by sustained FX inflows from the mining and agricultural sectors.
BSP Group General Manager – Treasury & Markets Rohan George said market activity remained firm throughout the quarter.
“Foreign exchange inflows moderated from July highs, which led to longer processing times in August and September as new FX orders outpaced available liquidity,” he explained.
The Bank of Papua New Guinea (BPNG) intervened in the FX market during August and September, after remaining inactive in July, to help ease liquidity pressures. During the quarter, the Kina depreciated by 1.6% against the US dollar to 0.2388, and by 2.3% against the Australian dollar to 0.3621.
George noted that while inflows from the agricultural sector are expected to ease, stronger performance in the mining sector—particularly gold—could partly offset this decline.
“Looking ahead, FX inflows from the agricultural sector are expected to soften, reflecting the delayed impact of recent commodity price declines — for instance, cocoa prices have fallen by 46%. However, this is likely to be partly offset by stronger, though uneven, inflows from the mining sector, particularly gold,” Mr George said.
He added: “While the FX market continues to navigate a challenging environment, BSP encourages customers to submit FX orders early to avoid delays. We remain committed to supporting our clients through proactive liquidity management and market insights.”
Global risks remain elevated, with the potential re-emergence of US–China trade tensions and subdued global economic conditions posing headwinds for PNG’s export performance and FX inflows.
The BPNG is expected to maintain a measured, wait-and-see approach to market interventions, stepping in only if pressures intensify.
BSP, formerly the Bank of South Pacific Limited, is a leading retail and corporate banking group headquartered in Papua New Guinea. Established in 1957, BSP operates in seven Pacific countries.
It has the largest branch network across Papua New Guinea, Cook Islands, Fiji, Samoa, Solomon Islands, Tonga, and Vanuatu, employing more than 4,000 people throughout the region.
BSP remains committed to its corporate and social responsibility initiatives, proudly partnering with communities across the Pacific to create positive change. Its extensive branch network is supported by a sophisticated electronic banking system, ensuring customer access wherever the bank operates.
BSP operates across the Pacific as follows:
- Over 120 branches
- More than 300 agents
- 550 ATMs (and growing)
- Upwards of 11,000 EFTPoS machines
BSP serves the corporate sector with leading cash management, treasury, lending, and corporate finance solutions. The bank combines local expertise with deep regional experience to deliver financial services that support businesses and communities across the Pacific.
