Emerging markets’ currencies have staged a comeback

AFTER DUSK men from Lea Lea, a village in Papua New Guinea, wade into the Coral Sea to spear fish sleeping near the seabed. Their torches twinkle in the darkness. But they are easy to miss against the riot of illumination from a $19bn liquefied natural gas plant. Built by ExxonMobil, it stores natural gas from the country’s highlands, which is piped to tankers at the end of a jetty over a kilometre in length.

When the plant was opened in April 2014, the oil price was well over $100 and gas was similarly valuable. Energy prices have since plummeted, but Papua New Guinea’s currency, the kina, has been allowed to fall only gradually. Its strength has hurt the country’s other exports, including coffee, tourism and fish. And because foreign exchange is underpriced, the central bank has been forced to limit its availability. A decline in Papua New Guinea’s currency would, then, be a relief for many.

That sets the country...

via The Economist: Finance and economics Business Feeds

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