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Australian dollar also climbs against US currency

PORT MORESBY, Papua New Guinea (PNG Post-Courier, May 1, 2008) – The kina has reached its peak against the US dollar clocking a high of 0.35 cents levels.

It reached a high of .3505 cents on Friday and has continued to remain there since then.

ANZ Bank reported in its weekly ANZ Weekly Update that the local currency strengthened by 0.3 per cent against the US dollar last week with the help of market forces of supply and demand and the Bank of Papua New Guinea (BPNG) intervention.

The bank reported that over the year the PNG kina had appreciated against the US dollar by 3.1 percent in the inter-bank market in the back of a strong Australian dollar and other major currencies.

"Mineral and agricultural inflows significantly influenced the PNG kina to further ascend," the ANZ Bank reported. "This week brings a mix feeling. (The) PNG kina might close flat at the end of the week. However, any chances of strengthening further should not be discarded though it should not fall too soon yet."

The bank reported that importers should be to continue enjoy good US dollar levels however, (they) may not do so on some PNG kina crosses.

ANZ Bank’s international economics division in Australia predicted in November last year that PNG importers would expect some relief in the foreign exchange in the next 12 months as the kina settled .34 US cents levels.

The bank projected that the kina may rise as high as 0.35 US cents levels and drop to 0.3400 cents levels and it would remain steady for the rest of the year.

Meanwhile the Australian dollar has been on an upward trend and closed last week at 0.95 cents levels against the US dollar.

The ANZ Bank said that the Australian dollar would breach the 0.95 cents levels in the coming weeks on the back of rate differential, weak US dollar, stronger commodity prices and risk improvements however it may not occur this week.

The continued strengthening of the Australian sent "heat waves" across the local business community in the country as they feared that this could affect their businesses as most of them imported from Australia.

The central bank allocated K60 million last year from its profit to act as a "buffer" in the event there was an instability in the exchange rates. The Port Moresby Chamber of Commerce and Industry said then that the impact of the rising Australian dollar would be "minimal".

BPNG stated in its recent Quarterly Economic Bulletin that the national economy would continue on its "robust growth".

Papua New Guinea Post-Courier:

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