What Is the PGK (Papua New Guinea Kina)?
The Papua New Guinea kina is the national currency of Papua New Guinea. Users of the currency affix monetary values with the symbol "K", as in 1,000K. It is referred to with the code PGK on foreign exchange markets.
The kina was introduced in 1975 and is administered by the nation's central bank, the Bank of Papua New Guinea.
- The kina is the national currency of Papua New Guinea.
- It was introduced in 1975, when it replaced the Australian dollar (AUD).
- Papua New Guinea is a relatively undeveloped economy that relies largely on subsistence agriculture and commodity exports.
Understanding the PGK
The kina came into effect in April 1975, when it replaced the previous currency, the Australian dollar. It is comprised of 100 subunits, called "toea." The name "kina" is derived from a type of shell, which had traditionally been used to facilitate local commerce.
Six coins were produced upon the kina's inception in 1975. Five of them were smaller coins, for 1, 2, 5, 10, and 20 toea, while one was larger, denoting one kina. Of these, two of the smaller coins—specifically, the 1 and 2 toea coins—were discontinued in 2006.
Initially, the only banknotes available were for small denominations of two, five, and 10 kina. It was only in 1977 that a 20 kina note was introduced, with the 50 and 100 kina notes following in 1988 and 2005, respectively.
The kina features symbols of Papua New Guinea's unique fauna and cultural artifacts, such as the famous Bird of Paradise. The 50-kina bill features the nation's Parliament building, as well as a portrait of Prime Minister Michael Somare.
Part of the reason for Papua New Guinea's relatively undeveloped economy is the fact that its rugged terrain makes it very expensive to produce infrastructure needed to exploit its rich natural resources and produce value-added export products. Today, much of the population relies on subsistence agriculture.
Real World Example of the PGK
The PGK is a free-floating currency whose value fluctuates based on supply and demand. In the past decade, the PGK has depreciated against the U.S. dollar (USD), from roughly 2.50 PGK per USD in 2009 to about 3.30 PGK per USD in 2019.
Today, Papua New Guinea remains a relatively undeveloped economy. With a population of nearly nine million, its main exports consist of commodities such as gold, copper, coffee, oil, and liquified natural gas (LNG). Agriculture still comprises a large percentage of the nation's economy, contributing about 20% of GDP.
On the whole, Papua New Guinea remains a rather poor country. According to the World Bank, nearly 40% of the population lived in poverty in 2009, with more than 65% earning less than $3.20 USD per day.