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The Central Bank of South Sudan on Tuesday reduced the benchmark lending rate to 10 percent from 13 percent in an attempt to mitigate negative impact of the COVID-19 pandemic and low oil prices.

The reduction of the Central Bank Rate (CBR) is one of six economic reform measures announced by the apex bank. In April, the bank reduced the lending rate to 13 percent from 15 percent.

Central Bank Governor Gamal Wani Abdalla also reduced the reserve for lenders from 15 percent to 10 percent in a bid to release liquidity to commercial banks.

“The downward revision of the CBR to 10 percent is meant to reduce the overall cost of financing extended to the private sector by commercial banks,” Abdalla told journalists in Juba.

“Affordable loans will benefit business and South Sudanese alike at this time of crisis,” he said, noting that the measures are aimed at creating favorable conditions for swift economic recovery after the COVID-19 pandemic.

Abdalla said the COVID-19 pandemic and fall in global oil prices will likely lead to negative economic growth in South Sudan in 2020.

The apex bank also called on lenders to restructure or renegotiate existing loans to protect businesses facing challenges caused by the COVID-19.

Abdalla said that the measures will also provide financial security and cushion business enterprises from the effects of the COVID-19 pandemic.

“These measures are intended to provide greater security to secure the financial systems, cushion commercial banks by availing adequate liquidity, to protect business enterprises and members of the society,” he told journalists in Juba.

Abdalla said despite the challenges, South Sudan’s inflation dropped significantly from over 100 percent in April 2019 to around 37.2 percent in April 2020. Enditem

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