Dr Addis Ababa Othow the newly appointed Governor of the Bank of South Sudan - courtesy

The Bank of South Sudan has reduced its lending rate to commercial banks from 15% to 13%, in a move aimed at easing the ongoing cash crisis and boosting economic growth.

The decision was made following a meeting of the Monetary Policy Committee (MPC) chaired by the central bank governor, Dr. Addis Ababa Othow.

In a statement signed by Dr. Othow and seen by Eye Radio, the central bank announced it had lowered the rate by 200 percentage points after a unanimous decision by the MPC.

“To achieve these measures, MPC revised key policy instruments and unanimously agreed to reduce the central bank rate by 200 percentage points from 15 percent to 13 percent, spur and stimulate credit to the private sector and support robust economic growth,” read part of the statement.

The bank also reviewed the Reserve Requirement Ratio (RRR). It increased the reserve ratio for deposits held in foreign currencies, such as US dollars, euros, and sterling pounds, from 20% to 25%.

However, the ratio for deposits held in South Sudanese Pounds remains at 20%.

“The MPC maintained the Reserve Requirement Ratio (RRC) for South Sudan Pound (SSP) at 20 percent of total deposits and raised the RRR for foreign currency (e.g. US dollars, Euro or Sterling Pound) from 20 percent to 25 percent of total deposits with immediate effect,” the statement continued.

“The Bank of South Sudan remains committed to supporting the economy at these tough times, and we are confident the bank sector will navigate successfully through fears and uncertainty,” the statement added.

The Bank of South Sudan last year lifted the SSP 10 million cash withdrawal limit for individual accounts, following a widespread cash shortage.

The policy shift came after weeks of a liquidity crisis that sparked public outcry.

The then Central Bank Governor, Johny Ohisa Damian, said the move was intended to encourage savings by prompting commercial banks to offer interest on savings accounts.

The change was expected to ease liquidity pressures and strengthen cooperation within the banking sector, paving the way for improved economic stability.