National, News

Salary’s market shock burdens Central Bank

By Mamer Abraham

Central Bank reassures the public that a recent increase in market prices and currency exchange rates is under control and close monitoring.

Bank of South Sudan governor, Dr. James Alic Garang (in picture above) clarifies that the recent market shock is due to increased salary scale, and it should not cause any panic.

According to the governor, the central bank is already implementing measures to contain the shock and stabilize the economy.

“As we approach the last quarter of 2023, coupled with the recent public sector pay rise, the Bank of South Sudan has observed a modest strengthening of the US dollars against the South Sudanese Pound (SSP) over the last week,” he told the press on Friday.

“To mitigate the adverse effects of this phenomenon, the Bank will work closely with the Ministry of Finance and Planning (MoFP) to ensure macroeconomic stability.”

Among the measures, he said the bank had purchased dollars from the government in order to pay salaries of the public servants as one means of containing the currently visible shocks; a step which he said had improved the exchange rate in recent days.

“Broadly, the Bank has put in place mechanisms to control this effect, by boosting its capacity to intervene in the foreign exchange market through the purchase of US dollars from the government to pay the salaries of the public employees,” he explained.

“And by utilizing provisions of the Treasury Single Account (TSA) agreement that allows the Bank to automatically exchange foreign component of domestic revenue into SSP to build reserves.”

The Bank’s governor asserted that his team would increase the Term Deposit Facility (TDF) auctions as well as the recent double increase in the dollar auctioning amount from $2 million to $4 million and maintain the Central Bank Interest Rate (CBR) at 15 percent.

“Going forward, the Bank assures the public that it will keep monitoring developments in the foreign exchange market keenly,” he added.

Modern Bank

South Sudan has been grappling with a towering currency exchange rate and inflation since last year as the official currency exchange rate increased from 450 SSP against a dollar to 1000 SSP against a dollar.

Dr. Alic took over the helm of the central Bank Early this month.

He pledged during his reception that his management would transform the bank into a modern ensuring its autonomy and advancing transparency and accountability through effective communication.

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