Foreign reserve drops to US$1.9b from US$2.2b
PNG’s foreign reserve has dropped from US$2.2 billion at the end of 2018 and beginning of 2019 to US$1.9 billion currently.
That is according to an update provided by the Central Bank on Monday this week.
Central Bank governor Loi Bakani attributed the drop to various interventions in the Forex market and also the repayment of major government debts such as the repayments of the sovereign bond interest which commenced this year as well.
“So our reserves at the moment stand at US$1.9 billion, so you can imagine from US$2.2 billion to US$1.9.
“Most of the decline is because of our interventions.
“We are assessing. We continue to go into the market on average US$50 million, for this month, only February we did over US$100 million (intervention into the market),” Governor Bakani said.
Governor Bakani also reported the start of interest payments for the country’s inaugural US$500 million Sovereign Bond, which are to be paid first in the 10 year interest repayment period before the principle to follow after the decade.
“This year we started to pay interest and that is quiet significant interest on the sovereign bond.
“The sovereign bond is committing the government for two payments a year.
“Just for the interest alone, after 10 years, then the government will have to pay the principle but for now up until the 10th year, government will have to pay interest and that is also what has been taking up some of the dollars.
“On top of that there are other debt servicing requirements that are done through us,” he explained.