The Governor of Bank of South Sudan has denied reports that the bank has run out of hard currency.
Gamal Abdalla Wani said, although the bank has not been getting enough foreign currency, it still has little in the reserve.
This week, the second deputy governor of the Central Bank was quoted by the press admitting that the bank had depleted its hard currency reserve.
This is after the South Sudanese Pound depreciated further against the US dollar.
$1 has been trailing at 400 South Sudanese Pounds in the black market, while at the Central Bank, a dollar was equivalent to 164 pounds.
Daniel Keck Pouch admitted that the fluctuation is being worsened by the various exchange rates and the lack of hard currency.
He stated that the situation may not improve unless South Sudan’s oil production is increased, or the price of crude oil goes up.
South Sudan gets much of its hard currency from oil sales.
But the current production levels of the crude oil have dropped from 250,000 barrels per day to around 180,000 barrels per day.
In another press briefing held in Juba, Friday, the Governor of the Central Bank of South Sudan said their accounts have not been depleted.
“It’s not true that we are really down on [our] knees,” said Wani.
He, however, quickly added that the bank does not have enough foreign reserve as it used to.
“It is true that some of you know we haven’t been getting what we have been getting before -in terms of revenues coming from outside,” he stated.
The Governor attributed their inability to inject money into the cash-strapped economy to “coronavirus that brought the world to half-knees.”
He argued that unlike South Sudan, first world countries that are also struggling with the pandemic are able to “supply their people with whatever they need [because] their budget goes to trillions.”
This week, an economist at Dr. John Garang Memorial University attributed the devaluation to the uncontrollable floating of the currency by the Central Bank.
A floating exchange rate is a regime where the currency price of a nation is set by the forex market based on supply and demand relative to other currencies.
But Professor Abraham Matoc warned that floating also makes currencies potentially more volatile or unstable in value when the market and other conditions change unpredictably.
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