Monetary policy and exchange rate policy deal with important decisions about how a modern trading economy operates.
The key elements of these policies now rest with the independent central bank – the Bank of Papua New Guinea (BPNG). Decisions by the government can have important impacts on monetary and exchange rate policies. These can be through channels such as the government’s budget, especially the fiscal policy stance (for example, the size of a budget deficit). The legislation which BPNG operates under is determined by the Parliament. Key issues are enclosed in this legislation, especially the key objectives of the central bank. In PNG, the main objective has been set as price stability. Some other countries have added other direct objectives, such as supporting economic growth.
The page links cover articles which focus on PNG’s monetary and exchange rate policies.