unmet foreign exchange orders with our commercial banks and our authorised foreign exchange dealers. in 2023, foreign currency inflows amounted to around 5. 6 billion dollars in contrast to total export receipts of around 14 billion dollars. had even half of that 14 billion dollars been brought onshore, we would be in a far stronger position this year. but this has been the pattern for over a decade. foreign currency shortages have been a persistent handbrake on growth, leading to lower investment, reduced competition in key sectors and ultimately higher prices. i am not for one moment failing to acknowledge the lower kina's impact on prices and the potential for inflationary pressure. but we need to acknowledge that these structural imbalances are contributing to a higher cost of doing business in papua new guinea than should otherwise be the case. the most critical factor affecting businesses, year after year, is limited access to foreign exchange and adjustments needed to be made. the overvaluation of the kina over the last decade, and the currency rationing we have had in place, has and continues to undermine growth. the imf has estimated papua new guinea's economy would be 3. 0 billion dollars larger had we not introduced currency rationing in 2014. in absolute terms, our economy would be ten percent larger today – with growth primarily driven by our non - resource sector – the sector that more than any other contributes to employment and boosts economic activity throughout png. 3 / 7 bis - central bankers'speeches we have data - driven evidence illustrating the impact currency rationing has had on our economy through restricting essential inputs for domestic production and business operations. this is why we have been working with the market since may of 2023 to make the necessary adjustments to the kina. these gradual, and measured adjustments, are being made to ensure inflation and price stability are maintained, to the best extent possible, ensuring that the benefits to the economy in the medium term more than offset the risks. and this is what we are seeing in practice. we were wrong to maintain an overvalued exchange rate when it was clearly not sustainable, and we did not have the reserves to support the kina at an artificially high level. we also found that our attempts to fix the value of the kina comprehensively failed in their objective to maintain medium term price stability. there is no example of a country that has developed and diversified its economy with an overvalued exchange rate. papua new guinea has been no

sound corporate governance and compliance culture will permit the supervisor to place more reliance on the bank ’ s internal processes. in this regard, supervisory experience underscores the importance of having appropriate levels of authority, responsibility, accountability, and checks and balances within each bank, including those of the board of directors, senior management and the assurance functions by way of risk, compliance and internal audit. i am hopeful that deliberations over the past two days on emerging trends in banking, changes in global regulatory landscape, the new bankruptcy regime in india and technological innovations affecting the way banks do business would prepare banks to not only cope up with the emerging challenges, but also help banks to use the opportunity provided by the new paradigm to further the agenda of inclusive and compliance oriented banking in the country. references 1. bank of international settlements, “ compliance and the compliance function in banks ”, bis 2. bank of international settlements, “ corporate governance principles for banks – guidelines ”, bis 3. flanner, mark. j, “ market discipline in bank supervision ”, chapter 15 of the oxford handbook of banking, first edition, oup 4. hagendorff, jens, “ corporate governance in banking ”, chapter 6 of the oxford handbook of banking, second edition, oup 5. mundra, s. s., “ re - emphasizing the role of compliance function in banks ”, speech delivered at the cafral conference of chief compliance officers in rbi, mumbai 6. chakrabarthy, k. c., “ compliance function in banks – back to the basics ”, speech delivered at the launch of certificate programmes on compliance function and training, mumbai 7. padmanabhan, g., “ emerging issues in cyber security in the financial sector ”, speech delivered at the sri chithira thirunal memorial lecture series organised by the state bank of travancore, thiruvananthapuram