PNG is seeking a loan from the International Finance Corporation (IFC) to help with its foreign exchange shortages. Previous media coverage talked of a proposed $US300 million loan. But the IFC website indicates only $US100 million will be considered by the IFC Board on 16 May. This is a credit facility for BSP. There are no credit requests for assistance to the ANZ or Westpac on this IFC website. Even this smaller $US100m credit line is unlikely to be approved unless it is done in coordination with the International Monetary Fund (IMF). The influential Financial Times in a recent editorial expressed concern about the IFC giving its support for foreign exchange lines of credit (such as the one sought by PNG) without the involvement of the IMF. The policy reason for needing IMF involvement is that PNG’s foreign exchange shortages require action to address the underlying causes. The problems cannot be sorted out with a short-term bandaid such as simple IFC credit line – especially as it is now only one-third of a bandaid anyway. The real causes of the foreign exchange shortages need to be addressed – the decline of business confidence, the move away from a market-based exchange rate to an over-valued peg arrangement, unclear budget policy, and the financing demands of off-budget loans such as the purchase of Oil Search shares without Parliamentary approval.