Implications of exchange rate overvaluation and world price shocks for PNG
The 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 pro...
| Autores principales: | , |
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| Formato: | Brief |
| Lenguaje: | Inglés |
| Publicado: |
International Food Policy Research Institute
2025
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| Materias: | |
| Acceso en línea: | https://hdl.handle.net/10568/176217 |
| _version_ | 1855537128485683200 |
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| author | Dorosh, Paul A. Pradesha, Angga |
| author_browse | Dorosh, Paul A. Pradesha, Angga |
| author_facet | Dorosh, Paul A. Pradesha, Angga |
| author_sort | Dorosh, Paul A. |
| collection | Repository of Agricultural Research Outputs (CGSpace) |
| description | The 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. |
| format | Brief |
| id | CGSpace176217 |
| institution | CGIAR Consortium |
| language | Inglés |
| publishDate | 2025 |
| publishDateRange | 2025 |
| publishDateSort | 2025 |
| publisher | International Food Policy Research Institute |
| publisherStr | International Food Policy Research Institute |
| record_format | dspace |
| spelling | CGSpace1762172026-01-07T13:19:22Z Implications of exchange rate overvaluation and world price shocks for PNG Dorosh, Paul A. Pradesha, Angga capital exchange rate policies prices valuation value chains value chain The 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. 2025-08-26 2025-08-27T14:35:43Z 2025-08-27T14:35:43Z Brief https://hdl.handle.net/10568/176217 en https://doi.org/10.2499/p15738coll2.135967 Open Access application/pdf International Food Policy Research Institute Dorosh, 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 |
| spellingShingle | capital exchange rate policies prices valuation value chains value chain Dorosh, Paul A. Pradesha, Angga Implications of exchange rate overvaluation and world price shocks for PNG |
| title | Implications of exchange rate overvaluation and world price shocks for PNG |
| title_full | Implications of exchange rate overvaluation and world price shocks for PNG |
| title_fullStr | Implications of exchange rate overvaluation and world price shocks for PNG |
| title_full_unstemmed | Implications of exchange rate overvaluation and world price shocks for PNG |
| title_short | Implications of exchange rate overvaluation and world price shocks for PNG |
| title_sort | implications of exchange rate overvaluation and world price shocks for png |
| topic | capital exchange rate policies prices valuation value chains value chain |
| url | https://hdl.handle.net/10568/176217 |
| work_keys_str_mv | AT doroshpaula implicationsofexchangerateovervaluationandworldpriceshocksforpng AT pradeshaangga implicationsofexchangerateovervaluationandworldpriceshocksforpng |