we live in today. i am confident that the board, management and staff of the central bank are up to the challenge. i would like to take the opportunity to thank the board to which i am most privileged to be the chairman ; the management and staff of the central bank for the support and commitment they continue to display in their various roles. i also wish to thank the auditor general and his staff for their assistance over the years. honourable minister with these few remarks, i now present to you the bank of png ’ s dividend for the 2003 financial year of k50 million. thank you.

was earned from domestic market operations due to higher level of government securities held by the bank and high interest rates on treasury bills ; interest expenditures were lower compared to 2002, due to limited involvement by the bank in the secondary market for treasury bills ; and generally expenditures were well controlled although significant costs were incurred in the areas of : – it management of systems ; – building maintenance ; – currency replenishment ; and – staffing costs - salaries and wages, and training. the way ahead honourable minister, the bank ’ s 2004 financial results would likely be affected by the current low interest rate environment and high liquidity situation that we confront since the beginning of the year. whilst we have rebuild our foreign exchange reserves, our interest earnings on them would be also affected by the low interest rates overseas and the appreciation of the kina exchange rate. it is therefore important that this dividend payment should not allow us to rest on our laurels and pat ourselves on the back. whilst we should take time to celebrate achieving such a result, we must also be mindful of our on - going duty to the government and the nation. there are still on - going work within the central bank to improve the design of our policies and their implementation. we are constantly striving to improve our operations to enhance efficiency in achieving our core objectives and functions by using the latest technology, follow international best practices, and continue to build our internal capacity. and indeed the brief but very significant visit by the deputy managing director of the imf, mr. agustins carstens, not only provided a strong sign of confidence on the government ’ s economic management, but also gave us the opportunity to discuss further technical assistance in various areas of the bank ’ s operations. let me mention some of the major tasks currently undertaken by the bank : • building up our capacity to supervise the financial system including life insurance and superannuation fund industries with external assistance ; • undertaking research work on the central bank ’ s operations and policies ; • implement an electronic registry system to help with our domestic trading of government securities ; • review of the exchange control regulations ; • drafting of the anti - money laundering legislations with government agencies ; and • involvement in the implementation of the png - adb microfinance project. these changes and the on - going work will ensure the central bank not only fulfills its mandate to the government and people of papua new guinea, but also allows us to be responsive to the everchanging vagaries of the world