PNG banks impose rules over coin shortage

A shortage of coins in Papua New Guinea has forced banks to impose strict rules for people wanting to open new accounts, forcing many to keep money in their homes.

Bank South Pacific, one of the banks affected, said major supermarkets were facing shortages and would not have enough coins until October.

Managing Director Garth Mcillwain blamed the shortage on a coin black market operating in the community

He said PNG's Central Bank had also underestimated the coin requirement for the local economy.

"A new industry of black market coin trading has developed in the last couple of years which has soaked up most of the coin," Mr Mcillwain said.

"By that I mean there are PMV drivers [bus drivers] and betelnut sellers who collect, generally speaking, most of the coin, for example they bag up K80 worth of twenty-toea coins and sell those to whoever wants to buy them for a hundred kina.

"That is the business that has developed and that has dried up most of the coins - silver coinage - in the country."

- RADIO AUSTRALIA