South Sudan Says Building Depleted Foreign Reserves

Governor of South Sudan’s Central Bank, Deng Tor Ngor [Photo| Ojwe Lumara]

By Ojwe Lumara

JUBA, 16 November 2018 [Gurtong]-Addressing reporters in Juba, Deng Tor Ngor said with the resumption of oil production and the gradual increase in global oil prices, the country’s foreign exchange reserves is improving.

South Sudan depends on export of oil for its foreign exchange and building of foreign reserves. With the onset of the civil war five years ago, oil production reduced, affecting the country’s economy.

Oil production resumed in Bentiu in August after the government and opposition groups agreed to reopen the oil fields, giving hope for economic recovery.

“With increase in global oil prices, at least our situation would be much better than two years ago,” Deng Tor said.  “We may not want to expose the figures that we have but you have our assurances that we would be accommodating more foreign reserves that would meet the needs of foreign exchange in our country,” he added.

The Central Bank Governor noted that the presence of international Non-Governmental Organizations (NGOs) also provide another source for hard currencies to the country.

“For those who are fearful that maybe foreign exchange reserves are dwindling, we are telling them that our foreign exchange position is improving and they should not have those fears,” he assured.

However, he said the Bank has been monitoring the depreciation of the South Sudanese Pounds against the US Dollars. On Thursday, one US dollar was selling at 230  SSP in the in the parallel market known as the black market while in the official bank rate, it was selling at 152 SSP.

Deng Tor said the fluctuation is as a result of an artificial demand created by speculators in the foreign exchange market.

He warned speculators “who are destabilizing foreign exchange market by creating unfounded artificial demand for foreign exchange” that the bank is coordinating with other relevant institutions to jointly address the artificial demand created by speculators.

In the last few years, inflation in the country went up to over 400 percent, according to the World Bank. However, the central bank Governor said inflation figures have been reduced significantly since July this year.

“The last figure that we had for the month of September, the inflation has come down from triple digits to mid double digits. So the figure for September, inflation came down to 49 percent from triple digits. We will release soon the figures of October,” he said.

“In the last few months, there had been relative stability in the exchange rate figures. When the rate started to move up recently, we took it to be a temporary situation. We are confident that with the current improvement in the key micro-economic fundamentals, we are not worried that the rate will be volatile like it used to be,” he explained.

The central bank Governor said they will address speculation in the foreign exchange market by availing hard currency to commercial banks and capable companies to import fuel and food.