The government is planning to inject into the market more hard currency to rescue the ailing economy, the Minister of Information says.
“The government is planning to inject into the market through the central bank and other commercial banks lamp sum that will enable us to control the economy,” Michael Makuei told reporters after an extraordinary cabinet meeting in Juba on Wednesday.
The move comes amidst economic fears as market prices shoot up and some traders closing shops due to the crazy exchange rate, a situation that seems to have been caused by several factors.
In September 2020, the second deputy governor of the Bank of South Sudan, Daniel Kech Pouch told reporters that the bank had run out of foreign reserves, bringing the economy to its knees.
Due to public outcry, the bank withdrew its statement, claiming it still had little in the reserve.
In addition, the minister of trade and industry admitted that there was nothing the government could do to stop the local currency from losing its value.
This compelled President Salva Kiir to form the economic crisis management committee to devise ways of revitalizing the economy.
As one of the measures, the economic crisis committee reportedly proposed changing the currency, saying many people were hoarding cash money in their houses.
Since the announcement, the South Sudanese Pound has been depreciating drastically, with a sharp peak.
As of Wednesday, $1 sold between 650 and 670 pounds.
This announcement, Makuei said, almost caused a rampage in the country.
“Our economy is being destroyed by some of the enemies who are trying to work hard against us,” he Makuei claimed, yet he is the one who made the announcement on Friday, October 9, 2020.
The government in the past tried to “inject” hard currency into the economy, an attempt that appeared futile.
In a report, a parliamentary committee said some business companies were issued Letters of Credit but they did not import any goods.
Despite receipt of oil proceeds over the years, the government has little to show for the riches, with no infrastructural development in the country.
Observers and researchers attribute this to grand corruption, with leaders stashing millions of dollars in offshore accounts as civil servants go for months without pay.
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