Photo credit: Bank South Pacific
According to Robin Fleming, chief executive officer of Bank South Pacific Financial Group Ltd (BSP), the country saw significant amounts of foreign exchange (FX) currency in December.
Strong commodity prices, end-of-year dividend payouts, and donor cash for different initiatives, according to Fleming.
He stated that foreign exchange receipts increased by 10.5%, or K965 million, from K9.21 billion in the September quarter to K10.175 billion in the December quarter of last year.
“FX market turnover rose by 7.4 per cent from a year earlier,” Fleming told The National.
“FX market turnover has risen by 9.8 per cent over the past six months, supported by strong commodity prices, in particular oil, copper, palm oil, coffee.
“Firmer commodity prices, combined with increased project-specific, donor foreign currency inflows and end of year dividend payments offset the lost FX market inflows from the closure of the Porgera gold mine (Barrick FX inflows down 75 per cent),”Fleming said.
“The kina has been stable and unchanged against the US dollar for the past 14 months, however the pullback in the Australian and US dollars amid the Coronavirus (Covid-19) related weakness in the Australian economy, strength in the US economy helped strengthen the kina against the Australian dollar.
“The kina is likely to remain stable against the US dollar, while a steady Australian dollar will see improved stability in the kina to Australian dollar cross rate.”
However, Fleming predicted that the significant FX inflows in December 2021 would drop in the March quarter of this year.
“December FX inflows have substantially reduced outstanding FX orders from high levels seen in November, and this is expected to reverse in January, February with post-Christmas restocking.”
Reference: Luma, Dale. The National (26 January 2022). “FX revenue up by 10.5pc: CEO”.
