Falling kina raises concerns in PNG

Falling kina raises concerns in PNG

Posted at 06:04 on 04 October, 2013 UTC

There are concerns in Papua New Guinea over a sharp fall in the value of the kina.

The currency has weakened in the past three months by 16 percent against the Australia dollar and nearly 14 percent against the US dollar.

Business Advantage in PNG quotes the chief executive of the PNG Manufacturers Council, Chey Scovell, as saying the fall is a real kick in the guts for local manufacturers.

The PNG central bank governor, Loi Bakani, says the depreciation is due to higher import demand and lower export receipts.

He says another impact is lower foreign direct investment inflow as the construction phase of the LNG project winds down.

The weakening kina is putting pressure on PNG’s inflation rate, which the Bank of PNG says is expected to reach 5.5 percent this year and 6.5 percent next year.

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