South Sudan’s central bank said Wednesday it will limit the amount of weekly hard currency auctions to commercial banks and forex bureaus due to the recent strengthening of the local currency, South Sudan pound (SSP) against the U.S. dollar in the market.
Johnny Ohisa Damian, Governor of the Bank of South Sudan said the apex bank has decided to reduce the auction money from 20 million dollars to 10 million dollars, citing appreciation of the pound against the dollar.
In August, the central bank had increased weekly auctioning of hard currency in a bid to mop up excess liquidity as the pound increasingly lost ground against the dollar.
Ohisa disclosed that the SSP this month appreciated against the dollar by 9.4 percent on average from 695.5 dollars on August 4 to the current 635 dollars.
He said this development represents a noticeable positive impact on the foreign exchange market.
Ohisa also revealed that the monthly consumer price index declined by 1.45 percent in August compared to 4.97 percent in July. And annual inflation has declined to about 2.54 percent in the month of August compared to the July annual increment of 6.43 percent.
“In light of these developments the bank of South Sudan will pursue contractionary monetary policy, while considering other monetary policy instruments under its disposal, as well as maintaining its presence in the foreign market, and continue to intervene occasionally in smoothening high exchange volatility,” Ohisa said.
South Sudan’s economy has been struggling to recover after years of conflict that disrupted oil production as its major source of foreign currency.
The country depends nearly 98 percent on oil-revenue to finance it’s annual fiscal budget. Enditem