The Bank of South Sudan has directed commercial banks to use the market exchange rate while trading in foreign currencies.
Currently, the central bank’s official exchange rate stands at 186 South Sudanese pounds per dollar, but businessmen have been paying about 610 pounds per dollar in the parallel market.
The Central Bank governor, Dier Tong, said banks must use one foreign exchange rate to be published daily.
“The Bank directs with immediate effect commercial banks and forex bureaus to trade in the market rate,” he said.
“The referenced exchange rate will be published every day by Bank of South Sudan based on commercial banks’ daily reports on the exchange rate.”
The Central Bank governor was speaking on Thursday when announcing the more than 170 million dollars approved by the International Monetary Fund to stabilize the country’s economy.
The fund of 174.2 million US dollars in emergency assistance for South Sudan is to address the Coronavirus and its impact on the economy.
The disbursement made under IMF’s Rapid Credit Facility aims to provide financing for urgent import-related challenges and maintain poverty-reducing and growth-enhancing spending.
The international financial body stated that South Sudan’s economy has been hit hard by the pandemic and the country’s economic activity will dwindle by 4.2 percent in its 2021 financial year.
It attributes this to the pandemic-related oil-price shock and devastating floods that have led to an economic downturn.
Part of the funding is to ensure adequate resource allocation for priority expenditure, including vaccinations, salaries, and critical investments.
Dier Tong reveals that half of the money will be used to support the country’s budget while the other half will be spent to meet imports.
The Central Bank governor said the institution has set both short and long-term policies to properly manage the cash.
This includes injecting additional three million dollars weekly into the economy.
“You know that we have been auctioning to forex bureaus two million dollars every week. Now we are also going to include banks. We are going to auction three million dollars to commercial banks. The total that we will be auctioning will be 5 million dollars,” he explained.
Mr. Tong said that stabilizing the economy by takings such measures will enable the Bank to grow its reserve by ten percent in the coming months.
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