PNG'S CURRENCY, THE KINA, FALLS TO RECORD LOWS

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ORT MORESBY, Papua New Guinea (May 5, 1999 - Radio Australia)---Papua New Guinea's currency, the kina, has fallen to record lows against major world currencies.

Radio Australia correspondent Richard Dinnen reports that PNG's falling foreign reserves are restricting efforts to prop up the kina on currency markets.

"The Kina was once stronger than the Australian dollar, but now buys just 61 cents. Against the U.S. dollar, the outlook is grim. A kina buys just 40 cents.

"PNG's Central Bank can do little to prop up the falling kina. Its foreign reserves have hit a three year low.

"PNG today began an international effort to promote a US$ 250 million bond issue -- with a presentation by Government ministers in Sydney.

"While a low kina may be attractive to foreign investors, it damages the domestic economy and could drive up an already high inflation rate.

"But there is some good news. An independent report on the Papua New Guinea economy, funded by AusAid, says conditions now favor a more stable short-term macro-economic outlook.

"Richard Dinnen, Port Moresby."

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