PNG Trade Landscape May See Gradual Rise in Chinese Yuan Use

Papua New Guinea’s trade environment could experience a gradual increase in Chinese Yuan transactions, but the United States dollar will remain a crucial settlement currency, Bank of Papua New Guinea Governor Elizabeth Genia says.

 PNG Trade Landscape May See Gradual Rise in Chinese Yuan Use

She stated that local banks are already offering quotations for Yuan buying and selling, signalling a shift toward broader currency options in the foreign exchange market.

Ms Genia said the move would allow PNG businesses to directly transact with Chinese exporters using their preferred currency, improving convenience and potentially reducing costs associated with currency conversions.

“The advantage of being able to source CNY locally through a PNG bank is it allows businesses to pay Chinese exporters in their home currency,” she said.

At the same time, she reassured that exporters in PNG could exchange Yuan domestically and receive payment in Kina, highlighting that the development would complement, not replace, the US dollar’s role.

Institute of National Affairs executive director Paul Barker said the systems for Yuan-based transactions were still in the early stages within the banking sector, although alternative mechanisms such as barter and digital currencies had emerged in limited cases.

He said China’s expanding international lending in Yuan and its position as a major exporter, as well as a key destination for PNG exports alongside Japan and Australia, could influence future currency usage patterns.

“Now, China seems willing to promote their currency more, to give themselves some extra autonomy from controls over the USD and transactions that the current US government has been applying more over the past 13 months,” he said.