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Garang boasts of enough hard currency reserves amid inflation fears

Author: Emmanuel J. AKile | Published: Monday, October 30, 2023

United States dollar bank notes. (-)

The Governor of the Bank of South Sudan has doubled the amount of hard currency auctioned to forex and commercial banks as he boasts of “sufficient” foreign reserves to stabilize the financial market.

James Alic Garang said during an extraordinary press conference that the Central Bank has increased the weekly auctions from two-million dollars to about four-million dollars.

According to the official, the decision was taken in response to the “modest” strengthening of the United States dollars against South Sudan pound – a situation blamed on the recent payment of civil servant’s salary.

Dr. Garang said the increase in the amount of hard currency auctions will help stabilize the current market prices.

“The amount we put out yesterday was double of what it used to be let’s say for the last one month,” he said at a press conference to address the plummeting of the local currency against dollar.

“The figure that we used to have been about 2-3 million [USD], and yesterday [Thursday], we put our 4 million, which is twice [of] what we used to have.”

Mr. Garang said he is confident of turning the tides against the U.S. dollar and stabilizing the market in few weeks.

“And at the moment, we have sufficient reserves to even increase this figure going forward. I will not say how much we are confident that we have enough reserves to increase the amount that we will auction. So, for the next few weeks we are confident that the rate will be stabilized.”

The official said the bank’s intervention in the current market situation is a normal practice, adding that the institution cannot watch the market to decide.

“Please take time, look at the region, look at Kenya, look at Uganda, look at Ethiopia, look at the region, intervening in the currency market is a normal thing as long as the country is under the managed float, because if we just hold our hands like this and let the market decide, the consequent will be dire.”

“So part of economic management is to sell the foreign currency to those in need, so that they can use it to demand other commodities.”

“We will maintain this intervention in the foreign exchange because we know it has a positive [result] in the end. But what I can promise, it is not the only instrument. There are others that we will review so that within our toolkit we will have more.”

 

 

 

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