KINA BANK FLAGS PRESSURE ON AUSTRALIAN DOLLAR EXCHANGE RATE

KINA Bank is warning that movements in the Australian dollar could place pressure on Papua New Guinea’s kina this year, even as the local economy shows resilience.

Speaking at the Prime Minister’s Back to Business Breakfast in Port Moresby on Tuesday 3rd February CEO Ivan Vidovich said global uncertainty continues to shape financial markets, with Australia’s strengthening economy playing a key role for PNG.

He noted the Australian dollar is trading around 70 US cents, and further interest rate rises in Australia could push the Kina–Australian dollar exchange rate closer to 0.30.

Vidovich explained that PNG’s reliance on Australian imports means a weaker kina could drive imported inflation raising costs for businesses and consumers.

Despite this, Kina Bank expects PNG’s economy to grow by about 4 percent in 2026, supported by strong demand for credit across retail, agriculture, construction, and logistics.

Vidovich also pointed to high global gold prices as a positive factor, boosting export earnings and foreign reserves.

He reaffirmed Kina Bank’s confidence as it prepares for the Financial Action Task Force’s grey-listing decision, adding that deeper domestic investment options will be critical to managing future currency and economic pressures.