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Bank blames depreciation of pound on payment gap

Bank blames depreciation of pound on payment gap
Johnny Ohisa Damian, ex-governor of the Bank of South Sudan | Credit| Courtesy

In an extraordinary meeting held by the Monetary Policy Committee chaired by the Hon. Johnny Ohisa Damian, Governor of the Bank of South Sudan on Friday May 19, 2023, the Monetary Policy Committee noted with concern the depreciation of the South Sudan Pounds over dollar rate.

The meeting discussed recent macroeconomic developments in the South Sudan economy.

In a press release obtained by The Radio Community, it was observed that most of the macroeconomic variables in the country’s economy have performed well and are within the targeted growth rates supported by the oil and service sectors (including government infrastructure investments, this is according to BoSS.

Despite the good performance in the macroeconomic variables, the committee say they are deeply concerned about the depreciation of the South Sudan Pounds.

This, according to them, is aggravated by the widening balance of the payment gap due to import dependent syndrome, and multiple external factors, such as the hikes of the interest rate by the Federal Bank.

It adds that the developments are also exacerbated by global inflationary pressures, the geopolitical tensions especially in eastern Europe which has pushed up food and energy prices.

‘’The depreciation is also exacerbated further by speculative uncertainties created by the current war in Sudan,’’ the statement reads.

In that note, members of the MPC resolved that.

  1. The BoSS coordinates with MoFP to ensure that the Treasury Single Account (TSA) is fully and properly implemented in letter and spirit. This will enable BoSS to continue building foreign currency reserves to cushion the economy.
  2. The BoSS will continue to interevent to meet the market needs. And will participate in the FX market, when necessary.
  3.        The BoSS to enhance monetary operations tools by accommodating short term tenure of 14-day,28 day and 56 days etc. of the Term Deposit Facility (TDF) and to aid the conduct of monetary policy.
  4. The BoSS will continue to update the public through various channels of communication including Facebook, Twitter, and Website.

‘’The Bank of South Sudan will continue to monitor developments in the FX market and respond with other additional measures when the need arises. Meanwhile we will continue to pursue a tight policy by keeping reserve money growth within the target,’.

On May 18, 2023, the exchange rate was at SSP990/USD.