Foreign exchange liquidity in PNG has improved significantly, helping businesses and supporting private sector lending, according to the Westpac’s latest PNG Economic Update and Outlook.
The report says IMF-led reforms and stronger resource export earnings have helped reduce PNG’s long-running foreign exchange backlog.
Typical order clearing times have improved from several weeks to just days.
The Bank of Papua New Guinea’s Monetary Policy Committee kept the Kina Facility Rate at 5.0 per cent and the Cash Reserve Requirement at 9.0 per cent at its June 2026 meeting.
The Committee also maintained the crawl-like exchange rate arrangement, noting that the Kina remains overvalued.
Westpac says the improved foreign exchange environment has helped private sector lending, with credit growth exceeding 13 per cent year-on-year at the end of 2025.
Demand for Government securities also remains strong, with recent Treasury Bill auctions fully subscribed and attracting bids well above the amount offered.
The report also notes that PNG continues to strengthen financial sector resilience, including through the Bank of Papua New Guinea’s Emergency Liquidity Assistance Policy Framework introduced in April 2026.