By William Madouk
Bank of South Sudan (BoSS) links multiple external factors to the exacerbating inflation, in the country.
This comes after the local currency, South Sudanese Pounds (SSP) plummeted to its lowest, at all-time against U.S dollar in the foreign exchange market.
As the Central Bank sold $1 for SSP 948, as per Friday circular, $1 was between SSP 998 to 1,000 in the black market.
The drastic decline of the local currency against the US dollars in the foreign exchange market prompted the BoSS’ Monetary Policy Committee to convene a meeting on Friday to look into the issue.
Clearing the air, BoSS conceded that the inflation is worsening, but blames it on the increase of interest rates by the US Federal Reserve Bank.
It also tied hyperinflation to the importation dependent syndrome, the Russia-Ukraine war and war in Sudan.
In a statement, the central bank said interest rate hike has made it impossible for them to borrow, adding that war in Ukraine has also disrupted global supply chains, increases food and energy prices.
BoSS also stated that due to the above factors, South Sudan’s already fragile economy is put into mess.
“These developments are exacerbated, partly by widening balance of payment gap due to import dependent syndrome, and multiple external factors, such as the hikes of interest rate by the Federal Reserve Bank, global inflationary pressures,” partly reads a statement seen by this outlet.
The bank also cited that the economic crisis is also caused by geopolitical tensions in Europe and Sudan.
“The geopolitical tensions especially in eastern Europe which has pushed up food and energy prices,” it added.
However, the committee noted that they would coordinate with the ministry of finance to keep Treasury Single Account (TSA) functionality as a monetary direction to arrest the runway inflation.
It further stated that the policy will help “enable BOSS to continue building foreign currency reserves to cushion the economy.”