The Bank of South Sudan has resolved to increase weekly auctions to commercial banks and forex bureaus. The move is to mitigate the depreciation of South Sudan Pounds against the U.S Dollar.
Bank Governor, Johnny Ohisa Damian says the Monetary Policy Committee has decided to increase the auctioning from the previous 3 million to 5 million US Dollars weekly.
“The bank will continue intervention by auctioning USD 5 million weekly to commercial banks and forex bureaus and will increase the amount when necessary,” he said.
The Governor adds that the committee has removed all restrictions on how frequently commercial banks might deposit money and that it will continue to keep an eye on the issue, analyze it, and take appropriate actions.
He also says the Central Bank has raised interest rates from 12% to 15% in order to entice commercial banks and other investors to make investments in the nation.
“The Bank of South Sudan is going to lift restrictions on the frequency of deposit by commercial banks and will increase its interest rate by 300 points to encourage commercial banks,” Damian adds.
Ohisa Damian stated says the monetary authorities are working in collaboration with Public Financial Management to contain currency depreciation, and inflationary pressures and restore macroeconomic stability.
“To contain the currency depreciation and inflationary pressure, the monetary authorities are working in close collaboration to implement the public financial management reforms,” he says.
Johnny Ohisa Damian says the Bank of South Sudan and the Ministry of Finance are working together to make the Treasury Single Account operational.
According to him, the Treasury Single Account will enable the Bank to automatically convert all US dollars into South Sudanese pounds in order to increase its foreign exchange reserves.
“The Bank of South Sudan and the Ministry of Finance are collaborating on the operationalization of a Treasury single account which allows the bank to automatically convert U.S dollars to SSP,” Damian adds.
The governor of the Central adds that the South Sudan international reserve position had been boosted by the USD 115 million approved and released by the International Monetary Fund.
Damian says the local exchange rate remains volatile due to the high demand for U.S. dollars to import goods from other countries, pay school fees, and the Easter season which has exerted more pressure on the exchange rates in the market.
For him, business entities and households hoard dollars for precautionary measures against currency depreciation and inflation.
Johnny Ohisa Damian, the governor of the Bank of South Sudan reports the banking sector is safe, sound, and resilient according to the analysis of commercial banks on the monetary system.
He says the level of international reserve is below the 4.5 months of import cover, a threshold required by the East African Community conversion criteria.
South Sudanese Pound loss value against United states dollars with an exchange rate of 90 thousand per 100 US dollars in the black market.