Kina to gain strenght in 2015

THE kina has stabilised and will begin to gain strength in the next year, Treasury Minister Patrick Pruaitch told Parliament on Tuesday.

In delivering the 2015 national budget and the 2014 supplementary budget, Mr Pruaitch assured all stakeholders, including business houses, investors, financial institutions and donor partners that the Government through the Bank of PNG in consultation with commercial banks had put up measures resulting in the kina’s value stabilising.

The measures included the exchange rate trading ban that was introduced in the middle of the year.

"Therefore, there should not be any cause for concern as the key fundamentals such as underlying economic growth continue to remain strong and are supported by buoyant private sector business activities," he said.

"In addition, the recent depreciation of the kina has delivered benefits to PNG exporters by making the price of their goods more competitive internationally. Going forward, the value of the kina is expected to strengthen when proceeds from the PNG LNG project exports start flowing into the country.

"The depreciation is attributed to higher foreign exchange outflows for import payments, repayment of foreign loans and dividends payments and also reflects developments in the economies of our major trading partners," Mr Pruaitch said.

Currently, the US dollar is recovering as the US economy improves, which results in the kina falling against the US dollar.