By Deng Machol
Juba – South Sudan Central Bank has announce an increase in the amount auctioned to commercial banks and forex bureaus to 13 million dollars on weekly basis in an effort to stabilize the market and curb inflation.
This is among polices set to stabilize the economy of the East Africa’s youngest country.
The money will be released every week to normalize the foreign exchange rate in the country.
Governor of the Bank of South Sudan, Moses Makur Deng says, the country is set to see moderate drop in exchange rate of foreign currency with the injection of additional hard currency.
Bank chief says the bank will continue to engage from time to time, in foreign exchange operations to inject or withdraw liquidity from the economy and to stabilize the market in the event of excess volatility.
He says the bank reacted swiftly by increasing the frequency and volume of the United States dollars that’s injecting into the market.
“We have increased the amount to be auctioned to forex bureaus from USD 2 million to 5 million and we have increased for banks from USD 3 million to 8 million. So, we are going to inject a total of USD 13 million a week to fight this temporary increase in the dollar rate,” Makur told the press in Juba on Tuesday.
Makur said they will continue to do that until the dollar is stabilized in the country.
“We will not accept the dollar to go up, we determined to bring it down,” said Makur.
He added that unless there are speculative activities involved, the increased amount of US dollars to be injected into the market will bring down the dollar rate.
Despite the continues injection a million of US dollar by the bank, the skyrocketing of commodity prices remains at peak, something Makur attributed it to an increase in taxation rates, stressing that the Central Bank is not responsible for controlling market prices but stabilize the exchange rate.
The bank has managed to unify the multiple exchange rates and stabilized it around SSP432 per 1 USD as of December 31st, 2021.
He is optimistic that at the end of January, the rate will begin to come down dramatically.
However, the country has seen a significant decline in annual inflation rate since the beginning of 2021. The annual headline inflation for December 2021 is 13.2% compared to 58% in December 2020.
Makur said the bank is determined to bring it down further to a single digit by the end 2022.
“To achieve this, the bank will deploy a number of monetary policy instruments, including a new instrument called ” term deposit facility,” said Makur.
Flooding, violence and COVID-19 continued to derailed the South Sudan’s economy.