BSP PNG| “Despite a 40 percent increase in quarterly Bank of PNG FX intervention and healthy foreign reserves, average outstanding Market FX orders remained stable for a third consecutive quarter,” says BSP Group GM Treasury and Markets, Rohan George.
“This growth was driven primarily by an 18.3 percent increase in inflows from exporters, state-owned enterprises (SOEs), and program support packages, reaching K5.4 billion. The Bank of PNG FX interventions expanded by 50.9 percent to K1.69 billion, constituting 23.8 percent of total FX inflows in Q2, up from 21.7 percent in Q1, “Mr George added.
He went on to say that BSP’s outstanding FX orders reached a peak of K863 million in mid- May, but were reduced to K342 million by the quarter’s end, reflecting increased FX inflows from exporters, SOEs, and central bank interventions. As a result, FX order execution times improved to 2 to 4 weeks, although fluctuations between 2 and 8 weeks are anticipated in Q3 2024.
“While BPNG’s intervention continues to play a pivotal role in addressing the persistent structural imbalance between FX inflows and outflows, the PGK/USD exchange rate under the ‘crawling peg’ over the quarter depreciated by 1.9 percent to 0.2600.
The Kina also weakened by 3.7 percent to 0.3912 against the Australian dollar, influenced by expectations of improved AUD/USD interest rate differentials influenced by growing expectations of Australian rate hike in September due to rising inflation in contrast to expectations of the first U.S. rate cut in Q4 2024, bolstered by stable inflation in a resilient economy,” Concluded Mr. George.
