Foreign exchange in PNG drop to manageable level

The foreign exchange backlog has dropped from K1.9 billion (US$597 million) to a “manageable” K700 million (US$220 million) – with about K280 million (US$88 million) of it from the Bank of South Pacific customers.

Bakani said earlier the K1.9 billion was the highest, before it dropped to K1.5 billion (US$471 million), and then K700 million.

“It’s around that all the time. That is the total for unserved orders,” he said.

BSP chief executive officer Robin Fleming told The National that the bank had about 40 per cent of the foreign exchange market share.

“So do the math and work around that,” he said.

He also explained that measures initiated by the Central Bank last year on the forex market had not impacted BSP’s earnings.

“It has not had a major impact on our revenues or earnings,” he said.

“The Bank of Papua New Guinea has put those particular measures in place for administrative reasons and it hasn’t had any large impact on our business.

“Foreign exchange earnings have remained tracking from last year.

“We got equally the full year benefit of foreign exchange across the Group and we need to take that into account.

“I think this year will be a more difficult year but I am sure there will be some additional flows that haven’t necessarily been budgeted for.

“The foreign exchange is very much flow-driven with a handful of exporters and a large number of importers. And when we get some of the larger flows come in, we are able to reduce the number of orders quite considerably.

“And it may well build up over time. So there are peaks and troughs. But certainly, we got about 40 per cent market share.”. SOURCE: THE NATIONAL/PACNEWS