Implications of exchange rate overvaluation and world price shocks for PNG

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dc.creatorDorosh, Paul A.
dc.creatorPradesha, Angga
dc.date2025-08-26
dc.date2025-08-27T14:35:43Z
dc.date2025-08-27T14:35:43Z
dc.date.accessioned2026-06-27T15:36:22Z
dc.descriptionThe large inflow of foreign capital to fund PNG investments in natural gas pipeline and processing infrastructure resulted in a surge in inflation beginning in 2011. Costs of production of tradable goods such as coffee and palm oil rose more (in kina terms) than their output prices, reducing the profitability of these sectors. These price distortions have continued to the present day, as restrictions on access to foreign exchange (mainly through delays in the release of funds) as demand for foreign exchange exceeds supply made available to the public. This policy note reviews PNG’s exchange rate policies and uses an economy-wide simulation model1 to quantify the impacts of these distortions. We conclude with a discussion of policy implications, highlighting the effects of a possible devaluation / depreciation of the kina.
dc.formatapplication/pdf
dc.identifierhttps://hdl.handle.net/10568/176217
dc.identifier.urihttp://hdl.handle.net/123456789/109213
dc.languageen
dc.publisherInternational Food Policy Research Institute
dc.relationhttps://doi.org/10.2499/p15738coll2.135967
dc.rightsOpen Access
dc.sourceDorosh, Paul; and Pradesha, Angga. 2025. Implications of exchange rate overvaluation and world price shocks for PNG. Papua New Guinea Project Note 21. Washington, DC: International Food Policy Research Institute. https://hdl.handle.net/10568/176217
dc.subjectcapital
dc.subjectexchange rate
dc.subjectpolicies
dc.subjectprices
dc.subjectvaluation
dc.subjectvalue chains
dc.subjectvalue chain
dc.titleImplications of exchange rate overvaluation and world price shocks for PNG
dc.typeBrief

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Instituto Internacional de Investigación sobre Políticas Alimentarias (IFPRI)