Steady continuous high foreign exchange inflows; fiscal discipline; balance of payments and fiscal surpluses; enabled the Bank of Papua New Guinea to pursue a stable exchange rate; which has led to low inflation and allowed for a reduction in domestic interest rates.
The recent reports of a net profit of K85 million by the Bank South Pacific and K120 million by the POSF from their 2004 operations, a K58 million net profit by NASFUND for the first quarter of 2005, announcements of expansion in business operations, and a pick-up in construction activity, are good indicators of improvements in economic activity.