The Bank of Papua New Guineahas indicatedthere’s sufficient liquidity inthe system to fundthe government’s 2.5 billion kina budget deficit this year.
The government is than encouraged to refrain from outside borrowing.
Central Bank Governor Loi Bekaki made this known at a business breakfast in Port Moresby last week.
Business representatives converge for an update involving policies and new interventions that may influencetheir operations. This time it was to hearthe presentation ofthe Central Bank’s Monetary Policy Statement.
There’s a total of about K8 billion in liquidity and of this amountoK5 billion is held in central bank bills.
Looking atthe objective ofthe Monetary Policy in Papua New Guinea this strategy is intended to achieve and maintain price stability; and entails low inflation supported by stable interest and exchange rates. Andthe maintenance of price stability leads to:
- Confidence inthe kina exchange rate and management ofthe economy;
- A foundation for stable fiscal operations ofthe government;
- Certainty for businesses to plan for long-term investments; and
- A stable macroeconomic environment conducive to economic growth.
The Central Bank however, indicates that inflation is projected to rise from last year’s 1.6% to 5.5% this year.
A full coverage ofthe Central Bank’s Monetary Policy Statement will be featured on our BusinessPNG program.
Festus Maiginap, National EMTV News