Morauta slams performance of PNG central bank

2:55 pm on 7 June 2017

A former Papua New Guinea prime minister and central bank governor says the latest quarterly statement shows the Bank of PNG has been printing money for the government, fuelling its wasteful spending.

Papua New Guinea Kina.

Papua New Guinea Kina. Photo: RNZI

Sir Mekere Morauta, who is standing in this month's election, said the central bank had irresponsibly financed the Budget deficit, and facilitated Prime Minister Peter O'Neill's waste and mismanagement.

He claims this had contributed to the growing mountain of public debt created by Mr O'Neill..

Sir Mekere said last year the bank lent the government almost $US615 million dollars, including $US246 million dollars in December alone.

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Photo: linkedin

He said this lending by the central bank was because there was no appetite in the private sector to buy debt instruments such as Treasury bills.

The former bank governor was also critical of the hijacking of old banknotes, which the bank revealed last month had happened in 2013.

He said in his time old notes were burnt in a furnace at the bank, but NBC News had quoted the current governor Loi Bakani saying the obselete notes had been sent to Europe for recycling, but had re-entered circulation in PNG.

Sir Mekere said the police should investigate whether this was allowed to happen.

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