Despite various interventions by O'Neill/Abel government in the foreign exchange market the shortage continue to persist in Papua New Guinea .
This was according to Bank South Pacific’s Economic and Market Insight report for the June quarter released on Wednesday this week.
It noted over the quarter, the PNG kina depreciated against the USD by 1.1% to 0.3040. Against the Australian dollar, the kina appreciated by 3.2 per cent to 0.4144, reflecting broader based weakness for the Australian dollar.
“Year on year, PGK/USD has depreciated 4.3 per cent or 105 points while the PGK/AUD cross is 1.2 per cent or 50 points stronger. Foreign exchange market turnover of K8.8 billion for the second quarter was 26.9 per cent higher than the first quarter.
“Turnover of K3.6 billion in June was the largest month since May-13 when K3.7 billion was recorded towards the end of the LNG construction phase.
“External US dollar financing through the Credit Suisse loan, has allowed Bank of PNG to maintain the level of foreign reserves whilst increasing the level of intervention by 56 per cent year on year.
“However there still exists shortage of foreign exchange liquidity which continues to weigh on PNG’s economic growth,” the report stated.
It stated the Central Bank’s foreign exchange reserve position has not changed much year on year at US$1.7 billion or five months of total import cover, adding that positive increase will only come about with new resource projects.
“Apart from central bank intervention, short-term solutions for the FX shortage will likely come from increased levels of foreign direct investment associated with new or extended energy or mineral projects.”
“This may materialize in an influx of foreign currency into the market in the next six to 12 months.”

With its monthly production maintained well above 3000 tonnes and production capacity above 106 per cent, Ramu NiCo is currently leading the industry of red laterite development and hydro-metallurgy worldwide.
This was revealed recently by the chairman of Ramu NiCo Management (MCC), Zong Shaoving, during a luncheon with landowner association representatives and company employees of its Madang Operation base late last month.
Mr Zong said Ramu NiCo has always been working positively to promote cooperation with landowners on community levels to improve the livelihood of landowners.
He said that Ramu NiCo’s mining operations are located in the most remote parts of Madang, however, the company has overcome tremendous difficulties to bring much needed infrastructures such as roads and bridges, schools and health centres in project impacted areas.
Zong said Ramu NiCo will continue to respond actively to community requests to realize sustainable development.
During the construction phase of the Ramu Project from 2007 to 2010 the company had made significant contributions in areas of local procurement, tax revenue, community compensation and relocation and over K250 million worth of business opportunities was provided, 11 public service facilities including schools, clinics, power and water supply stations. Furthermore, the company also provided over 3000 job opportunities for the Nationals.
Mr Zong said following the commencement of production, Ramu NiCo had spend K435 million on local procurement and K136 million on taxes. It is also paying K50 million for business opportunities, K50,000 for education and K80,000 for medical assistance on a yearly basis.
In early July, Ramu NiCo made its first royalty payment, which was endorsed by the Government.
The royalty payment would assist landowners and underpin community development.

Papua New Guinea supports the decision at the Pacific Islands Forum Foreign Ministers meeting for the “Blue Pacific” countries to collectively put forward their positions on climate change, ocean conservation, security, and economic development.
Minister for Foreign Affairs and Trade, Rimbink Pato, said he endorsed Pacific regionalism as expressed in the “Blue Pacific” identity.
“I also congratulate Nauru for its theme for the forthcoming Leaders’ meetings: ‘Building a Strong Pacific: Our People, Our Islands, Our Will’,” Mr Pato said.
“This theme emphasises the determination of the Blue Pacific countries to act together to protect the Pacific Ocean, which is a priceless treasure for all humanity, and to work for the economic and social development of our peoples.”
Mr Pato said Pacific regionalism was at the heart of the agenda of the ministerial meeting last Friday .
“As well as climate change, security and economic development we tackled other important issues such as fisheries surveillance, maritime boundaries, and connectivity, and recommended a draft declaration on security for the leaders’ consideration and endorsement in Nauru,” he said.
Mr Pato said PNG endorsed the move to commend to the leaders that Wallis and Futuna be admitted as associate member of PIF.
He said the meeting noted the initiative of PNG as chair of APEC 2018 to arrange an informal dialogue between Pacific Islands leaders and APEC leaders on the margins of the November summit, noting that Australia and New Zealand would be invited as APEC members.
“I also made sure at the meeting to express gratitude to Australia for its generous assistance for aircraft surveillance and maritime boundaries, and for the longstanding security assistance provided by Australia and New Zealand.”
Mr Pato said the ministers recognised that the PIF ministerial meeting was well chaired by Prime Minister of Samoa, Tuilaepa Aiono Sailele Malielegaoi, with the help of PIF Secretary-General Dame Meg Taylor.

The Papua New Guinea Hunters aim is to maintain a spot in the top six of the Intrust Super Cup.
But to host a semi-final at home is also a possibility but coach Michael Marum said sitting on sixth spot is a good result given the performance at the start of the season.
“It’s a pretty long season but our aim is to be at the top six and after that its the finals. We will be certainly taking one game at a time,” Marum said.
Certainly there’s no secret in the Hunters successful season last year.
There was nothing different this year knowing pretty well that the last two remaining games will be tough.
Winning a premiership is something else but defending it comes with a lot of effort and the Hunters will put everything in front of their home crowd, Marum said.
It will also be the last home game before heading to Australia for their last game against the Queensland Capras.
“Wynnum Manly Seagulls are a very good team and after their victory against the North Devils last weekend, they will come hard against us,” he said.
“We want to ask all our supporters to come in numbers to support us as this will be our last home game and after this there won’t be any more ISC games held here in Port Moresby.
“We handled the competition really well and again, we are happy to be sixth at the moment but we have two games to go so we will take one game at a time. This weekend against Seagulls and next weekend will be against Capras and see where we are.
“Right now we are not looking at what’s ahead of us. If we finish this season in the top four, then we will (hopefully) host another home semi-final but like I said, we will be taking one game at a time and we are not in a hurry to look ahead,” Marum said in an interview yesterday.
Marum said Sunday’s game at the Oil Search National Football Stadium will also be the last time for fans and supporters to see some of the players competing.
“Once again, I urge all our supporters to come in numbers and support as this will be the only time you will see these players playing at home. Some of them will not be with us anymore,” Marum said. Post Courier/OnePNG

More than 300 news outlets are launching a campaign on Thursday to counter President Donald Trump’s attacks and promote a free press.
The Boston Globe made the call last week for a nationwide denouncement of the president’s “dirty war” against the media, using the hashtag #EnemyOfNone.
Mr Trump has derided media reports as “fake news” and attacked journalists as “enemies of the people”.
The Boston Globe had pledged to write an editorial “on the dangers of the administration’s assault on the press” on August 16, and asked others to do the same.
The initial positive response from 100 news organisations has grown closer to 350 with major US national newspapers and smaller local outlets answering the call, along with international publications like the UK newspaper The Guardian.
Starting with the Boston Globe itself, the editorial there, headlined Journalists Are Not The Enemy, argued that a free press had been a core American principle for more than 200 years
The New York Times chose the headline A Free Press Needs You, calling Mr Trump’s attacks “dangerous to the lifeblood of democracy”. It published excerpts from dozens more publications beneath
The New York Post – hardly a left-leaning paper – answered the Globe’s call by saying “Who are we to disagree?” adding: “It may be frustrating to argue that just because we print inconvenient truths doesn’t mean that we’re fake news, but being a journalist isn’t a popularity contest. All we can do is to keep reporting.” But it also said: “Will this make a difference? Not one whit”
The Philadelphia Inquirer said its city was the birthplace of US democracy, writing: “If the press is not free from reprisal, punishment or suspicion for unpopular views or information, neither is the country. Neither are its people”
Opinion writers at McClatchy put out an editorial for the 30 daily newspapers it runs, including the Miami Herald, saying they hardly ever spoke with one voice but were doing so now. It said “enemies of the people” was “what Nazis called Jews. It’s how Joseph Stalin’s critics were marked for execution”
Another paper to join the campaign was the Topeka Capital-Journal which said of Mr Trump’s attack on the media: “It’s sinister. It’s destructive. And it must end now.” The paper was one of the few to endorse Mr Trump in 2016.
The fact that Mr Trump won without such media endorsements may cast doubt on whether the Globe’s campaign would actually dent his support.
A poll released on Tuesday by Quinnipiac University suggested that 51% of Republican voters now believed the media to be “the enemy of the people rather than an important part of democracy” and 52% of the Republican supporters polled were not concerned the Mr Trump’s criticism would lead to violence against journalists.
Among all voters, 65% believe the news media to be an important part of democracy, the poll suggests.

– BBC