South Sudan apex bank said Tuesday it will inject 13 million U.S. dollars, an increase from the previous 8 million dollars, into the economy on a weekly basis in order to strengthen the local currency, pound, against the dollar.
Moses Makur Deng, Governor of the Bank of South Sudan (BOSS) said the apex bank would auction 8 million dollars to commercial banks and 5 million dollars to forex bureaus in order to mop up excess liquidity as the South Sudanese pound (SSP) slowly gains strength against the dollar.
“We have seen a significant decline in annual inflation rate in South Sudan since the beginning of 2021. The annual headline inflation for December 2021 is 13.2 percent compared to 58 percent in December 2020,” he told journalists in Juba, adding that he is determined to further bring down inflation to a single digit by the end of 2022.
He laid down a number of monetary policy instruments that include encouraging commercial banks to increase lending to the private sector to 40 percent of their total deposits and building international reserves equivalent to four months of import cover as some of the measures.
In addition, Deng said that commercial banks will be required to maintain with the central bank a minimum reserve requirement ratio of 15 percent and 20 percent on local and foreign currencies denominated deposits respectively.
“The bank of South Sudan will engage in open market operations, involving purchases and sales of eligible securities to regulate the money supply and credit conditions in the economy,” he disclosed.
Deng also said that they have managed to unify the multiple exchange rates, thus stabilizing the rate at SSP 432 per dollar as of December 2021.