PNG Government takes control of forex trading
Prime Minister Hon. Peter O’Neill said there was no need for panic as the foreign reserves currently held by the Bank of Papua New Guinea still stand at a record high of US$2.2 billion (K5.9bn).
He was responding to queries after Sports Minister Justin Tkatchenko told Parliament that lack of foreign reserves has slowed down work at the new Pacific Games netball stadium at Bisini Parade.
"The fact is that we have put in some control measures into our foreign currency trading largely because the commercial banks were charging very big margins when they were transacting on foreign currency trading,” Prime Minister Hon. Peter O’Neill said.
"As a result when you look at the last four or five financial reports of all three big banks, you will see that large portions of their profits came out of foreign currency trading, which means that they are not lending enough money to our businessmen and women. "We want them to increase their lending book, we don’t want them to increase their foreign currency trading. So that is why we have limited the margins in foreign currency trading. As a result there is a bit of tightening that is going on but every priority has been met.
"Whoever got proper clearance from the tax office and all the foreign exchange controls are getting paid through the process. "There is no need for us to worry about availability of foreign currency, we have got close to $2.2 billion in foreign currency in reserves, in fact February 20 we are expecting our first lot of revenues coming in from LNG.
"We are also encouraging all our exporters keeping their money in foreign accounts to bring their money back to PNG so that they can be accountable and be taxed on revenues that they are getting.
"It is not as bad as it sounds. It is fairly well under control. "We are discussing with the central bank to have some flexibilities now that we have given a clear message to the commercial banks."
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