The Bank of Papua New Guinea (BPNG) has submitted its 2024 Annual Report and Financial Statements to the Minister for Treasury, in accordance with the Central Banking (Amendment) Act of 2024. The report captures a pivotal year marked by structural reform, digital innovation, monetary tightening, and renewed focus on institutional integrity.
The timely submission of the report reflects the Bank’s commitment to transparency, discipline and legal compliance. It outlines the central bank’s operational performance, policy direction and audited financial results for the year ending 31 December 2024.
“Publishing our Annual Report is more than a legal obligation. It is an important mechanism for communicating the work of the Bank and being accountable to the people of Papua New Guinea,” Governor Elizabeth Genia said.
The Bank recorded a net operating profit of K242.2 million (approx. US$65 million), a significant increase from K44.2 million (approx. US$11.8 million) in 2023. Operating income rose to K770.1 million (approx. US$207 million), largely due to stronger returns from foreign currency investments, while total expenditure was contained at K527.9 million (approx. US$142 million). The distributable profit remains under Retained Earnings, pending a decision by the Board.
In a separate press release, the Bank confirmed a dividend payment of K48.5 million (approx. US$13.1 million) to the National Government as part of its reporting process. This transfer reflects the allocation of distributable profit from the net operating profit of K242.2 million (approx. US$65 million), in accordance with statutory requirements following independent audit and review.
The process is consistent with international central banking and accounting standards, and forms part of the Bank’s annual financial cycle, the bank said.
Under the amended Central Banking Act, 80 percent of distributable profit is retained in the General Reserve Account until minimum capital thresholds are met. The Bank also recorded K837.8 million (approx. US$225 million) in unrealised gains transferred to the Unrealised Profits Reserve, and K114.1 million (approx. US$30.6 million) to the Gold Reserve, in line with international accounting standards. No funds were transferred to the General or Building Reserve accounts in 2024.
A major development during the year was the passage of the Central Banking (Amendment) Act 2024, which followed Phase II of the Independent Advisory Group (IAG) review. The legislation restructured the Bank’s governance and formally established a new Monetary Policy Committee (MPC), which will take over responsibility for setting monetary policy from 2025.
Throughout 2024, the Bank maintained a tightening monetary stance to address foreign exchange imbalances, contain inflation, and absorb excess domestic liquidity. Key reforms under an IMF-supported programme included the implementation of an interest rate corridor, adjustments to the cash reserve requirement (CRR), and the launch of weekly foreign exchange auctions.
By year-end, BPNG had conducted 26 foreign exchange auctions totalling more than US$1 billion, significantly reducing order backlogs and enhancing transparency. The kina depreciated by 6.8 percent against the US dollar during the year, under a managed "crawling peg" strategy intended to restore currency convertibility while managing inflation risks.
Despite currency depreciation, inflation remained contained. The trimmed mean inflation rate rose by just 3.3 percent over the year. However, the Bank noted that deposit and lending rates in the private sector were largely unresponsive to policy adjustments — highlighting continued weaknesses in the interest rate transmission mechanism.
Institutional reforms progressed in parallel. A new executive structure, aligned with the Bank’s Vision 2050 strategy, was approved by the Board. Each executive position is now explicitly linked to strategic priorities and key performance indicators.
Board Chair David Toua OBE commended the Bank’s operational discipline and ethics reforms. He acknowledged the dismissal of a number of staff involved in the manipulation of employee benefits, calling the swift action essential for maintaining the Bank’s credibility.
“Ethics is equally vital to governance,” Mr Toua said. “The integrity of BPNG must be beyond reproach.”
The Bank also continued to expand financial inclusion and digital innovation. It issued commercial banking licences to three new institutions: TISA Bank, Credit Bank PNG, and the state-owned National Banking Corporation (formerly People’s Micro Bank). These approvals marked the most significant expansion of PNG’s banking sector in years.
In March 2024, the Bank launched the Green Finance Centre in partnership with the Global Green Growth Institute (GGGI), the New Zealand Ministry of Foreign Affairs and Trade, and other development partners. The Centre supports the implementation of the Inclusive Green Finance Policy and aligns with PNG’s Third National Financial Inclusion Strategy.
The Bank also completed major technological upgrades, including enhancements to the Kina Automated Transfer System (KATS), expansion of mobile and digital payment services, and support for fintech development under its Regulatory Sandbox framework.
Regionally, BPNG maintained strong partnerships through forums such as the South East Asian Central Banks (SEACEN) group and the Pacific Islands Central Bank Supervisory College. It also contributed to PNG’s second Mutual Evaluation under the Asia Pacific Group on Money Laundering, which identified critical reforms needed to avoid grey-listing by the Financial Action Task Force (FATF).
Governor Genia reaffirmed the Bank’s long-term focus on inclusive growth, financial soundness, and institutional renewal. “None of this progress would be possible without the tireless work of our staff, the strategic guidance of the Board and the trust of the people of Papua New Guinea,” she said.
With the Monetary Policy Committee set to assume policy-making duties in 2025, and Vision 2050 implementation gaining momentum, the Bank of Papua New Guinea enters the new fiscal year with stronger financial, operational, and governance foundations, the report added.
