THE Government plans to inject US$46 million (about K142.6 million) into the foreign exchange market to ease the shortage problem.
A statement from the Bank of Papua New Guinea and the International Revenue Commission yesterday said there would be a further US$54 mil (about K167.4 mil) released into the market later this week as part of the two-phase intervention by BPNG.
The statement said: “In regard to the US$100 million (K310 mil) intervention in the market, the bank has decided to implement the intervention in two phases.
“The first release of US$46 million to be effected immediately for many small import orders.
“The remaining US$54 million will be effected for few large imports in the first week of October 2017.”
Deputy Prime Minister and Treasurer Charles Abel thanked BPNG and IRC for undertaking immediate measures as part of the Government’s 100-day economic recovery plan.
“The fundamental issue is the over-reliance on imports of processed goods for our needs and the lack of self-sufficiency in agricultural food production which will result in major import replacement,” Abel said.
“This is exacerbated by a tax system that is quite complex to administer affecting collection of tax revenue that is due to the State. The 100-day plan intends to begin the process to address these issues.”
A memorandum of understanding will be signed this month to allow Puma’s purchase of crude oil from Oil Search to be in kina.
BPNG met with Oil Search and Puma Energy to implement the agreement reached between Abel and both parties to sell to Puma Energy domestically-produced crude oil which will be finalised and a memorandum signed.
The arrangement will accommodate 50 per cent of Puma’s crude imports.
BPNG is also in the process of reviewing offshore foreign currency accounts to assess if those accounts holders have to remit some of the balances to their inshore accounts.
The Government is also understood to be in talks with the Asian Development Bank and the World Bank for a further loan facility which is expected to be finalised this month.