Dramatic improvement in forex availability provides relief for Papua New Guinea businesses
Foreign exchange shortages have been the biggest impediment to business in Papua New Guinea for more than a decade. But the situation has improved dramatically in 2025, and businesses are reaping the benefits, as leading CEOs share with Business Advantage PNG.
Surging gold prices have contributed to the rising availability of forex. Credit: K92 Mining
Even with 2025 not yet over, the dramatic improvement in the availability of foreign exchange is a leading contender for the best Papua New Guinean business story of the year.
In June, Business Advantage PNG reported on a significant fall in foreign exchange backlogs, with banks seeing their order books approach zero. This trend has continued and even improved in recent months, as business leaders in PNG have confirmed to Business Advantage PNG in recent weeks.
It’s been that good that the central bank has even managed to buy surplus foreign currency from the commercial banks.
“We’re now getting to a stage where we’re seeing a balancing of the FX market,” says Andrew Cairns, Chief Executive of Westpac PNG. “There’s now a great ability to be able to match orders with currency.”
“The improvement has been so substantial that the central bank has, for the first time in nearly a decade, been able to purchase surplus foreign currency from the market,” observes Herbert Maguma, Managing Partner at Deloitte PNG. “It’s a clear signal of just how significant the turnaround has been.”
Main drivers
Ivan Vidovich, CEO and Managing Director of Kina Bank, points to the Bank of Papua New Guinea’s (BPNG) regular interventions as a factor in the improved foreign exchange availability.
In October, the Central Bank intervened with US$116 million to clear outstanding import orders, according to Kina Bank’s monthly economic report.
Vidovich and Maguma both also give credit to the high prices seen for several of PNG’s key export commodities in 2025.
“I think the biggest contributor is the commodity prices, in particular gold,” Maguma says.
“We’re also at the tail end of the boom of the agricultural commodity prices as well. Cocoa and coffee prices are [now] starting to come down, but they have provided a huge relief.”
The depreciation of the kina – a feature of the flexible exchange rate system introduced by the BPNG on the advice of the International Monetary Fund – has also contributed to some companies bringing foreign currency into PNG more quickly than usual, according to Maguma.
Foreign direct investment on prospective natural resources projects, such as Twinza’s Pasca A offshore gas project and the TotalEnergies-Petronas Mailu-1 offshore oil exploration project, have also brought in quantities of foreign currency, he notes.
Benefits for business
PNG’s foreign exchange shortages date back to the end of the PNG LNG construction phase in 2014, with forex ranking as the biggest impediment in eight of the last 10 editions of the annual Business Advantage PNG/Westpac PNG 100 CEO Survey.
The dissipation of forex backlogs in 2025 has proven to be of great relief to businesses of all kinds, including Nasfund, PNG’s largest private sector superannuation fund.
“Between last year and this year, we have been able to send more money out [for foreign investments] because of the relaxation in FX,” Rajeev Sharma, Nasfund’s CEO, tells Business Advantage PNG.
Similarly, Ivan Vidovich notes that Kina Bank’s customers are also beginning to submit forex orders for the purpose of repatriating dividends overseas.
This stands in stark contrast to one year ago, when the BPNG issued a directive to place “non-essential” orders for purposes such as dividend payments and offshore investments at the bottom of the queue for orders.
Looking back to last year, Vidovich says that some of Kina Bank’s customers “were waiting more than three months” to have their orders filled.
“From around 18 months, that has reduced to weeks, if not days,” he says. “That has been a very healthy and well appreciated development for the market.”
Better planning
The improved availability of forex is also making it easier for businesses to plan their overseas ordering.
“The forecasting part was a lot worse in previous years,” Everett Chue, Director of Pacific Industries, a food and beverages manufacturer and holder of the PepsiCo bottling licence for PNG, tells Business Advantage PNG.
“Now, you’ve got a higher certainty of knowing when you’re going to receive it [forex], and then you’re not making payments in advance out of fear of not being able to get it.”
Chue says his firm is experiencing high demand this year, and he attributes “some part” of that growth to the improved availability of forex.
“There’s more economic activity, because people are bringing more money in, because they know they can get it out, and also people are able to generate economic activity because they’re getting access to forex to invest,” Chue says.
A note of caution
While PNG’s forex situation has improved, there is no certainty that the shortages are over completely, as BSP Treasury and Markets’ Monthly Market Pulse for November cautions:
“While waiting times for new FX orders from lodgement to execution are expected to stay low, they may temporarily rise in the coming months due to an anticipated slowdown in inflows.
“Nonetheless, the FX market is in a significantly stronger position compared to a year ago.”
