By Bida Elly David
The Central Bank of South Sudan has set to auction additional Eight Million United State Dollars Next week to commercial Banks and Forex Bureaus as a monetary mechanism to restore the value of the local currency that depreciated to lower level.
This came following the on-going depreciation of the local currency against the Dollars and the constant inflation that has hindered the market.
Speaking to the media yesterday, Moses Makur, the governor of Central Bank said that commercial Banks shall have the auction of 5 Million Dollars on Monday while 3 Million shall be allocated for forex bureaus on Thursday respectively.
“As from next week, the Central Bank of South Sudan has decided to auction 8 Million dollars where five million will to commercials and 3 Million to forex bureaus. We will watch the trend of the rate to be persistent so that it doesn’t go down and after two weeks, we shall increase it to Thirteen Million(13,000,000 SSP a week. We are even ready to increase it further to twenty Million (20,000,000) a week to make sure that the dollars come down. We warned the speculators on the expectation on the rise of dollar we the aim to deal with the trending depreciation of the local currency’’ he said.
Furthermore, Moses reiterated that the devaluation of the local currency was due to random and passive speculation of the market by dealers as well as exemption of South Sudan from borrowings by the International monetary agencies.
“The depreciation of the local currency against the United States Dollars was due to speculation by market dealers, the on-going payment of civil servants’ arrears, suspension of loans to South Sudan l by the International Monetary Fund (IMF) and the World Bank (WB) because of unmet conditions’’ he echoed.
He echoed that Central Bank would work harder towards restoring the lost value of the local currency to the initial rate as well as try its level best to reduce inflation.
‘’We are working towards bringing back the rate of Dollar that previously appreciated high back to 400 South Sudanese pounds per a dollar. As long as the pounds do not go down, we will increase the amount with frequency of auction. We are going to introduce other instruments that do the same currency auction such as Central Bank Bills for banks to buy in order to help fight monetary devaluation as well as manage money supply as appropriate. We want to inform the public that basically the Bank of South Sudan has not increased the money supply but still within the range of 10% which was projected early this year. All these challenges happening here are all temporary but not fundamental although will be paying some salary arrears’’ Moses added.
However, Moses underscored that the conflict between Russia and Ukraine has fully contributed to decline of the global economy especially South Sudan.
“The war in Ukraine has been a major shock for global commodity markets. South Sudan’s oil revenues are increasing speedily and the country is not directly dependent on imports of grain from Ukraine and Russia but we are still seeing rise in prices of refined petroleum products and food items which are imported from our regional countries. These developments are expected to contribute to a rise in inflation in the coming Months’’ Moses continued. “We are aware that there has been increase in prices of commodities due to multiple reasons especially the exchange rate and high taxes. Our final objective for auctioning the dollar is to ensure dollar rate drops to 40,000 South Sudanese Pounds per 100’’he said.