BSP’s credit rating is constrained by Papua New Guinea’s country rating given my Standard and Poor (S&P) earlier this year.
Notwithstanding this S&P raised BSP’s long term issuer credit rating to B+.
“We continue to grow and diversity our funding base over 2013 with depositors and fund providers recognizing our strong business position, entrenched importance to the financial system of the countries in which we operate as well as our fundamental financial strategy and security.
“This has helped fulfill part of our strategy to increase USD funding to customers who use our whole-of-bank solutions, compared with those sole transactional relationships” BSP states.
BSP reports low domestic nominal and negative real interest rate due to high levels of domestic financial system liquidity.
“Low monetary policy risked implicitly tax savings, disrupting the signaling function of the interests for efficient capital allocation and increased the value of any unfunded pension liabilities” the bank reports.